Tue, Jul 06, 2004 - Page 10 News List

Government hopes to get NT$180 billion in stake sales


The government plans to raise about NT$180 billion (US$5.3 billion) selling holdings in Chung-hwa Telecom Co (中華電信), China Steel Corp (中鋼) and other companies this year, aiming to narrow its budget deficit.

The announcement helped drive stocks lower, with the TAIEX falling 1.5 percent to 5,659.78 points.

The government, though, may not achieve its target given its track record, said Michael On, who manages the equivalent of US$30 million as managing director at Beyond Asset Management Co in Taipei. "The move definitely is negative as it increases the supply of shares."

Still, "I don't think the government can succeed this time as it's unlikely to sell the shares cheap at a time when the stock market is performing so poorly," he said.

The government failed for three years to sell some of its holdings in Chunghwa Telecom before it completed an overseas sale in July last year.

The government, which controls a 70 percent stake in China Airlines (華航), last year postponed plans to sell half its shares because the stock price at the time lagged its target price of NT$17 a share.

The government has been running deficits for the last four years. The gap this year is forecast to reach 13 percent to a record NT$257 billion.

"The Cabinet plans to accelerate the sales, which will raise some NT$180 billion, in the second half," said Chen Ching-tsai, deputy chief of the Directorate General of Budget, Accounting and Statistics.

"We will try not to influence the stock market. The sales may be overseas or in Taiwan," he said.

About NT$540 billion of assets are on the sale list, including some NT$150 billion added for this year, said Wu Wen-hung, chief of the directorate's privatization task force.

Officials said shares in Taiwan Semiconductor Manufacturing Co (台積電), Taiwan Fertilizer Co (台肥) and other companies would also be put up for sale.

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