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TAIEX hits four-month low

Taiwan's benchmark index dropped to a four-month low yesterday as investors feared tighter Chinese labor rules would increase costs of Taiwanese operations in China.

The TAIEX fell 302.89 points, or 3.57 percent, to 8,187.95.

Traders said selling pressure will likely persist in coming days due to weak investor confidence stemming from slow seasonal demand for electronics, and political uncertainties ahead of islandwide elections in the first quarter.

Taiwan shares rose moderately early yesterday but changed course mid-morning after local newspapers reported Foxconn Group (富士康集團) has agreed to sign a new labor agreement with its mainland China employees, which analysts said will increase costs.

The law takes effect Jan. 1.

Central bank sells bonds

The central bank said yesterday that it sold NT$25 billion (US$772 million) of 10-year government bonds on behalf of the Ministry of Finance at a yield of 2.509 percent, according to a statement issued yesterday.

The yield is higher than the return rate of 2.42 percent in the last sale of NT$40 billion 10-year bonds on Sept. 19, the statement said.

CPC may restart damaged unit

CPC Corp, Taiwan (台灣中油) may restart a fire-damaged crude distillation unit at its Kaohsiung refinery next week.

Repairs to the equipment have been completed and the state-run company is waiting for the Kaohsiung city government's approval to resume production, Jessica Tang, a CPC spokeswoman, said by phone from Taipei today.
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