Sat, Nov 04, 2006 - Page 12 News List

NT dollar records largest weekly gain in six months

PROFIT BOOST Riding on listed firms' positive earnings reports, the local currency was the best performer in the region, closing up 1.1 percent

STAFF WRITER , WITH AGENCIES

The New Taiwan dollar recorded its biggest weekly gain in six months as better-than-expected earnings from companies including Hon Hai Precision Industry Co (鴻海精密) drew overseas investors to domestic stocks.

The local currency was the best performer in Asia this week as funds abroad bought more shares than they sold for the four days through yesterday, driving the benchmark TAIEX to a five-month high.

The NT dollar showed little reaction in late trading yesterday to news that prosecutors had indicted President Chen Shui-bian's (陳水扁) wife, Wu Shu-jen (吳淑珍), for fraud in a probe on alleged misuse of state funds.

"Foreign investors, seeing the stock market is pretty good, put a lot of money into Taiwan," said Tarcisio Tong, a currency trader at Union Bank of Taiwan (聯邦銀行).

The NT dollar rose 1.1 percent this week to close at NT$32.92 against the US dollar, the biggest weekly rally since the five days up through April 28, according to Taipei Forex Inc. Turnover rose to US$1.32 billion from US$1 billion in the previous day.

The local currency had its strongest close since Sept. 21.

Tong said the NT dollar would likely move between NT$32.75 and NT$32.95 next week.

Foreign investors purchased a net NT$5.95 billion (US$181 million) of equities yesterday, Taiwan Stock Exchange data show.

Hon Hai Precision, the nation's largest electronics maker, reported record profit in the third quarter. China Steel Corp (中鋼), the nation's largest steelmaker, said pretax profit almost doubled. Nanya Technology Corp (南亞 科技), the nation's second-largest maker of computer memory chips, on Thursday reported that sales last month rose 51 percent from a year earlier.

The local currency also gained support from the strong demand in the non-deliverable forward contract market ahead of the release of US employment figures, traders said.

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