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Shares fall 2.15%

Taiwanese share prices closed 2.15 percent lower yesterday after weakness on Wall Street fueled concerns over the US market's prospects, dealers said.

The weighted index closed down 183.23 points at 8,323.05 on turnover of NT$110.44 billion (US$3.41 billion).

Decliners outnumbered advancers 1,139 to 878, with 411 stocks unchanged. Sixteen stocks closed limit-up, while 26 were limit-down.

Tu Jin-lung (杜金龍), chairman of Grand Cathay Investment Services Corp (大華投信), said investors were cautious in the first trading session of the year.

Formosa Plastics Corp (台塑) closed down NT$3.1 at NT$88. It fell despite a report that the government is set to approve a major Formosa investment in China.

Mega Financial Holding Co (兆豐金控) fell NT$0.35 to NT$19.6 as its unit Mega International Commercial Bank (兆豐商銀) wrote down its residential mortgage-backed securities portfolio by NT$317 million for the fourth quarter of last year.

Korean exports hit record

South Korean exports rose 14.2 percent from a year earlier to a record US$371.8 billion last year, a government report said yesterday.

It was the fifth straight year that exports have grown by double digits, the Ministry of Commerce, Industry and Energy said.

The preliminary figures showed that imports rose 15.3 percent to US$356.7 billion on a customs-cleared basis, resulting in a trade surplus of US$15.1 billion.

The trade surplus has stayed above US$10 billion since 2002.

Last month, exports rose 15.5 percent year-on-year to US$33.2 billion while imports increased 24 percent to US$34.1 billion.

The ministry forecast that two-way trade will surpass the US$800 billion mark this year, with exports rising 11.6 percent on-year to US$415 billion and imports gaining 12.7 percent to US$402 billion.

Thai inflation at year-high

Thailand's inflation accelerated to a 12-month high last month as surging oil costs fanned prices of food and fuel, raising the likelihood that the central bank may raise its benchmark interest rate on Jan. 16.

Consumer prices gained 3.2 percent from a year earlier after rising 3 percent in November, Siripol Yodmuangcharoen, the Commerce Ministry's permanent secretary, told a press briefing in Bangkok yesterday.

"Inflation will be a problem because of surging oil prices," said Sethaput Suthiwartnarueput, chief economist at SCB Securities Ltd in Bangkok. "The central bank is expected to raise the rate by a quarter point in the second half, when local economic growth gains more momentum."

Inflation averaged 2.3 percent last year, Siripol said. That compares with its target to keep price increases below 2.5 percent last year. After cutting five times before July last year, Bank of Thailand policymakers have kept the rate on hold at 3.25 percent at the past three meetings.

Chemical firm merger on hold

Financial Supervisory Commission officials yesterday suspended a NT$1.29 billion (US$40 million) fundraising plan by Lee Chang Yung Chemical Industry Corp (李長榮化學工業) to acquire Taiwan Polypropylene Co (福聚).

Upon completion of the merger and recapitalization, Lee Chang Yung's capital would be boosted to NT$6.5 billion. But the commission found that the company's proposed share-swap ratio would disadvantage Taiwan Polypropylene's existing shareholders.

NT dollar unchanged

The New Taiwan dollar was unchanged yesterday, closing at NT$32.433 against the greenback on turnover of US$725 million.
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