TAIEX makes slight rebound
Taiwanese shares closed 1.22 percent higher yesterday as investors hunted for bargains after losses in the previous session, dealers said.
The weighted index closed up 105.39 points at the day’s high of 8,724.47, off a low of 8,631.46, on turnover of NT$97.27 billion (US$3.21 billion).
“Despite a rebound after a quite disappointing week, investors could not bring themselves to help push the upside much further,” Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said.
The contraction in turnover yesterday was a clear indication of this, he said, adding that the best-case scenario for the local bourse would be rangebound consolidation in the near term.
After having locked in profits accumulated in previous months on an anticipated rapprochement with China, people are now increasingly watchful of fundamental factors, he said.
“The big picture is that the world is faced with slower economic growth compounded by rising inflation,” Shih said.
Investors kept their eyes on local high-tech stocks on expectations of new contracts being consigned to companies at the Computex trade show in Taipei that begins today, dealers said.
Minister skeptical on tax idea
Minister of Finance Lee Sush-der (李述德) yesterday voiced reservations about the idea of axing tax credit for high-income industries as proposed by a chip tycoon last week to encourage the nation’s rich to pay more taxes.
Lee told the legislature’s Finance Committee he did not agree with Taiwan Semiconductor Manufacturing Co (台積電) chairman Morris Chang (張忠謀) completely, arguing that tax incentives are necessary to help local industries prevent brain drain.
Chang said on Friday that the government should not seek in any manner to keep alive the law aimed at promoting industrial development by providing various tax benefits. The law is due to expire at the end of next year.
Several legislators had lauded Chang’s courage in making the remarks, but argued that any hike of the top 40 percent tax rate for the nation’s individual income earners would scare away foreign investors and end up hurting the nation’s economic competitiveness.
Hon Hai forecasts sales growth
Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, forecast annual sales of US$50 billion to US$60 billion, said an analyst who attended the company’s annual shareholder meeting in Taipei.
Chairman Terry Gou (郭台銘) urged investors to “look at the longer term,” said Calvin Huang, a Taipei-based analyst at Daiwa Institute of Research Ltd, who rates the stock “sell.”
Hon Hai makes iPods for Apple Inc, game consoles for Sony Corp and computers for Dell Inc. The company posted parent-level sales of NT$1.2 trillion (US$39.6 billion) and consolidated sales of NT$1.7 trillion last year.
Hon Hai spokesman Edmund Ding (丁祈安) said he couldn’t immediately confirm if the forecast given by Gou was for consolidated or parent-level sales.
NT dollar hits six-week high
The NT dollar yesterday advanced to the highest level in six weeks on optimism that closer ties with China will boost the economy.
“The planned opening to mainland money will boost demand for the Taiwan dollar, boding well for the currency,” said Dariusz Kowalczyk, chief investment officer at CFC Seymour Ltd in Hong Kong.
The NT dollar advanced 0.6 percent to close at NT$30.219 yesterday on turnover of US$1.532 billion, according to Taipei Forex Inc. The currency may “test NT$30,” Kowalczyk said.
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