■ Yuanta may buy company
Yuanta Core Pacific Securities Co (元大京華證券), Taiwan's largest brokerage, said it may take over a financial holding company, giving it a license to lend, sell insurance, manage assets and bid for other financial institutions.
"There are two possible targets among the 14 financial holding companies" in Taiwan, Yuanta President and Managing Director Lee Chang (張立秋) said. Chang declined to identify the two companies or give a timeframe for any purchase.
Yuanta is also looking to expand in South Korea. The brokerage was chosen as a preferred bidder to buy LG Investment & Securities Co, Korea Development Bank, the sale's arranger, said last month. LG Investment is Korea's second-largest brokerage.
Chang said the company plans to pay cash for LG Investment, declining to say how much it's prepared to bid for the brokerage.
■ Foreign funds flee Taiwan
Overseas investors sold more Taiwan stocks than they bought in May on concerns about rising oil prices and possible interest rate increases. There was a net outflow of funds for the first time in 15 months.
The Securities and Futures Commission said net sales of shares by foreign investors totaled NT$76.3 billion (US$2.3 billion).
"Net outflows of foreign funds were even larger at US$3.1 billion in May, the first since February last year," said Huang Yun-chih, a division chief at the commission, clarifying local newspaper reports that net fund outflows in May totaled US$3.6 billion.
Analysts had attributed the outflow to recent oil price surges, possible interest rate increases, terror attacks in the Middle East and well as China's moves to slow its overheated economy.
■ Formosa Plastics head in China
Formosa Plastics Group (台塑) Chairman Wang Yung-chin (王永慶) is currently visiting China and is probably inspecting a petrochemical zone in southeastern China, an executive said yesterday.
Wang's trip comes at a sensitive time with China stepping up verbal attacks on Taiwan businessmen, especially Chi Mei Group Chairman Hsu Wen-lung(許文龍).
The 87-year-old tycoon, who departed Wednesday, is expected to return to Taiwan Monday. He is probably inspecting the petrochemical zone in Ningpo, Zhejiang province, the executive said.
■ Buy NT dollar: Merrill Lynch
Merrill Lynch & Co recommends that investors buy the New Taiwan dollar, Thai baht and Chinese yuan on expectations China will try to engineer a gradual economic slowdown, maintaining demand for the region's exports.
"We expect growth and inflation in China to surprise on the upside over the course of the year, with positive implications for the regional economy," Hong Kong-based chief Asia-Pacific economist T.J. Bond and Vincent Low, foreign-exchange strategist in Singapore, wrote in the report.
Expectations of rising consumer prices in Taiwan and Thailand may prompt "policy tightening" in the form of higher domestic interest rates or a stronger currency, they wrote.
By contrast, the "considerable slack" in US product and labor markets will help curb inflationary pressures and lower expectations of an interest rate increase by the Federal Reserve, the report said.
■ NT dollar loses ground
The New Taiwan dollar yesterday continued to lose ground against its US counterpart, reflecting hopes that key oil producers would raise output in a bid to help curb record oil prices, dealers said.
The NT dollar dropped NT$0.032 to close at NT$33.591 against the greenback on the Taipei foreign exchange market, on a turnover of US$546 million.
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