Bonds may decline on speculation stock gains will accelerate after the Lunar New Year holiday next week, damping demand for debt, following a report that the government approved investment from two overseas hedge funds.
The funds' approval was aimed at further opening Taiwan's markets, according to Securities and Futures Commission Vice Chairman Wu Tang-chieh (
"Foreign investors continue to be bullish on Taiwan's stocks and economy, so that's negative for bonds," said Stephanie Wang, a bond trader at Taipei-based International Bills Finance Corp (
The 2.875 percent bond maturing in December 2013 gained 0.0212, or NT$21.20 per NT$100,000 face amount, to 103.3079, according to Gretai Securities Market (櫃台買賣中心), the nation's over-the-counter market.
Its yield dropped 0.2 basis point to 2.49 percent. A basis point is 0.01 percentage point.
Today is the last day of trading before the bond market closes for the Lunar New Year holiday starting next week. Trading will resume on Jan. 27.
"Changes in the MSCI may come as early as February, giving Taiwan stocks a higher chance of rallying than bonds," said Simon Lin, a fund manager at E.Sun Securities Investment Trust (
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