■ Stocks slide to five-week low
Shares fell to a five-week low yesterday on declines in US stocks overnight and on fears of higher taxes on employee share bonuses. The TAIEX dropped 94.28 points, or 1.36 percent, to 6,843.98, its lowest close since April 12. "Sustained selling pressure from foreign investors, following Wall Street's drop, weighed on technology shares today," Ta Ching Securities manager Daniel Liu said. A proposal in the legislature to increase the tax on share bonuses hit high-priced technology companies in particular, traders said. "If the bill is passed, companies will have to find other ways to retain outstanding employees," said President Securities Co (統一證券) manager Maggie Chien.
■ UMC plans share buyback
Shares of United Microelectronics Corp (UMC, 聯電), the world's second-largest made-to-order chip supplier, rose after the company said it planned to buy back as much as 2 percent of its own stock. The stake was valued at NT$8 billion (US$250 million) by the stock's closing price yesterday. UMC shares rose 1.5 percent to close at NT$20.1 on the Taiwan Stock Exchange. The chipmaker said on Monday that it would buy back as many as 400 million shares and write off 1 billion shares from a previous buyback. UMC plans to buy the shares at between NT$13.90 and NT$32.15 each, the company said in a statement to the Taiwan Stock Exchange on Monday after the market closed. The buyback will be completed by July 22, with the shares purchased to be earmarked for transfer to workers, the statement said.
■ Modine to shut Taiwan plant
Modine Manufacturing Co, a maker of heating and cooling product parts in Racine, Wisconsin, said on Monday it would cut about 200 jobs when it closes a plant in Taiwan. The company said the closure was part of a global restructuring plan. The company also said it would also offer early retirement to about 200 US salaried workers who were planning to retire soon. Modine said it expected to close the Taiwan plant within three months. The plant makes heat pipes for the personal computer and laptop market.
■ NT dollar still under pressure
Depreciation pressure building on the New Taiwan dollar has not been fully digested over the short term, with foreign investors presently showing no signs of slowing the pace of selling local currency and stocks, experts said yesterday. he NT dollar yesterday gained NT$0.154 against the US dollar and closed at NT$31.992 on the Taipei foreign exchange market. ealers forecast the NT dollar might hover around NT$32.3 and NT$32.8 against the greenback in the near term.
■ Consumption taxes low
China and India have emerged as the Asia-Pacific countries with the highest consumption taxes while Singapore, Taiwan and Japan feature the lowest, a PricewaterhouseCoopers report said yesterday. uch taxes are growing in popularity with governments because value-added taxes (VATs) and goods and services taxes (GSTs) allow authorities to raise revenue without stifling business growth. China's 17 percent consumption tax rate topped the VAT-GST table compiled by the firm. India and New Zealand followed with 12.5 percent. The Philippines came third with 10 percent while Australia, Cambodia, Indonesia, South Korea and Vietnam all have a 10 percent consumption tax rate. Singapore, Taiwan and Japan are all at 5 percent.