Fri, Oct 24, 2008 - Page 11 News List

Business Briefs

AGENCIES

Shares close lower

Share prices closed 2.72 percent lower yesterday amid mounting fears of a global recession and poor corporate profit reports, dealers said.

The weighted index was off 132.08 points to 4,730.51 on turnover of NT$25.73 billion (US$779.7 million).

Losers outnumbered gainers 1,341 to 159, while 245 stocks were unchanged.

“Investors took to the sidelines after Wall Street plunged overnight on growing global recession fears,” Mars Hsu of Grand Cathay Securities (大華證券) said.

The market was also weighed down by the widespread poor corporate outlook and the weakness of the regional markets, he said.

“I’m afraid the [Taiwan] market is unlikely to rebound before the world’s major markets stabilize,” he said.

Taiwan liquidity is fine: CEPD

The chairman of the Council for Economic Planning and Development (CEPD) gave an assurance yesterday that Taiwan’s economy is not vulnerable to a recent global shortage in US dollar liquidity.

During a press conference at the Executive Yuan, Chen Tian-jy (陳添枝) reiterated that a lack of US dollar liquidity will not compromise the nation’s economy because Taiwan has large foreign exchange reserves and low external debts.

Chen noted that the depreciation of the Taiwan currency is caused by the withdrawal of US capital from the country, emphasizing that the Central Bank of the Republic of China will intervene at the appropriate time to stabilize the market if the situation gets worse.

Huaku to boost projects

Huaku Development Co (華固建設), Taiwan’s fourth-largest developer, will increase investment in commercial projects next year to take advantage of a drop in material prices as the residential property market slows.

Half of the company’s projects by value will be commercial next year, compared with none this year and “virtually none” in the previous two years, said Johnson Yeh, a spokesman for Taipei-based Huaku. The three planned buildings will only generate income starting in about 2011 because they must be built first, he said.

“Unlike residential property, for commercial property you don’t do presales, you have to complete the building before selling it,” Yeh said in a telephone interview yesterday. “Given that raw material prices have fallen, right now is a good time to build.”

Commercial property may also be appealing to Chinese investors, Yeh said.

Residential projects are selling more slowly than Huaku forecast, Yeh said. Huaku expects to complete sales of two residential projects in Taipei’s Nangang (南港) district as late as the second quarter of next year, rather than this month as it forecast when it began marketing in April, Yeh said.

Hong Kong adds cash to banks

The Hong Kong Monetary Authority is adding cash to the banking system to prevent the territory’s currency from strengthening beyond its fixed exchange rate.

The city’s central bank injected HK$3.877 billion (US$500 million) into the financial system, it said yesterday in a statement.

The Hong Kong dollar has been pegged to its US counterpart since 1983, and is allowed to trade at HK$0.05 on either side of HK$7.8. It traded at HK$7.7535 per dollar as of 4:15pm yesterday, compared with HK$7.8120 two months ago.

“The Hong Kong dollar exchange rate has strengthened to near the strong side” of the band, HKMA spokesman Thomas Chan said. “These developments reflect increased demand for Hong Kong dollars.”

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