ADRs in Focus: AU Optronics Shares Fall

The stock lost $1.20, or 6.5 percent, to $17.26. The Taiwan-based company trades in the U.S. using American Depositary Receipts, also known as ADRs, which are securities designed to allow American investors to trade shares of companies based overseas.

Jefferies & Co. analyst Brian White said news from Jabil which uses LCD panels when making TVs, among many other products could likely hurt shares of AU Optronics and competitor Corning Inc.

"We continue to believe investors should remain selective when investing within the electronics supply chain in 2008 in light of a concerning economic environment and volatile demand trends," White said in a note to clients.

Yet demand for LCD products will likely grow, said White, who increased his industry forecast. He now expects 2008 LCD glass shipments of 2.23 billion square feet, or 27 percent growth compared with a previous 23 percent growth expectation.

Visits to Taiwanese plants helped formulate the bullish outlook, White said. He currently rates shares as "Buy" with a $25 price target.

During intraday trading on Wall Street Wednesday, the Bank of New York Emerging Markets ADR Index which includes shares of companies based in China, Mexico, Brazil and more lost 1.54 points to 338.16. The Bank of New York Composite ADR Index shed 0.19 points to 169.18 as the U.S. markets fell in afternoon trading.