Mon, Jan 10, 2005 - Page 10 News List

Government to cut budget deficit with NT$32bn share cull

BLOOMBERG

The Cabinet is planning to sell NT$32.1 billion (US$1 billion) in shares this year to help cut a record budget deficit, said an official from the Development Fund (開發基金), which manages the shares.

Selections of shares from Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電) and Mega Financial Holding Co (兆豐金控) will be the "major contributors" in the sale, said James Ho (何俊輝), deputy secretary-general of the fund's management committee. "We will try to find a strategic investor."

The plan, which still needs the approval of the legislature, probably won't be executed until August at the earliest, Ho said.

Rebound

Taiwan's stock market needs to rebound for the share sales to succeed, investors said.

"The market needs to be more bullish," said James Liu, head of equities at ING CHB Securities Investment in Taipei, which counts shares in TSMC among the NT$10 billion it has under management. "Mega could be more attractive because of its valuation."

The TAIEX gained 1.6 percent in value in the period from Jan. 2 to Dec. 31 last year. TSMC shares lost 12 percent of their value in the period while Mega's shares gained about 3 percent.

Aiming to sell

The fund, which has NT$140 billion in assets, aims to sell NT$7.5 billion in TSMC shares and NT$15.1 billion in Mega shares, according to Ho.

The fund is the second-largest shareholder in TSMC, with a 7.4-percent stake in the world's largest supplier of made-to-order chips, according to Bloomberg data.

The fund plans to sell 200 million Taiwan Fertilizer Co (台肥) shares in a local five-day auction that starts today, Ho said.

The fund also aims to sell shares in Vanguard International Semiconductor Corp (世界先進), Ho added, without providing any details.

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