Index falls on lackluster trade
Taiwanese shares closed down 0.2 percent in quiet trade yesterday, with many investors keeping to the sidelines ahead of the New Year holiday, dealers said.
The weighted index fell 8.92 points to 4,416.16 on turnover of NT$23.64 billion (US$716 million), down from Friday’s NT$29.92 billion.
The market opened flat as foreign institutional investors stayed away over the festive period and shares moved in a narrow range amid lingering concerns over the global economic meltdown, dealers said.
“Unless investors return to the global markets, in particular Wall Street, after the New Year holiday, the local market is very likely to drift without direction,” Grand Cathay Securities (大華證券) analyst Mars Hsu said.
FSC chief defends short-selling
Restrictions on the short-selling of 150 stocks will be lifted after the nation’s new regulatory chief deemed a ban imposed by his predecessor no longer necessary.
“Allowing short-selling is not as horrible as some of our legislators seem to think,” Financial Supervisory Commission Chairman Sean Chen (陳冲) told Bloomberg in an interview on Friday. “Eventually, the short-sellers have to buy back shares, and they need support in the future.”
Taiwan’s softer stance comes as Germany, France and Belgium this month extended protection for banks and insurers against short-selling. The technique, in which investors aim to profit by selling borrowed shares and replacing them with stock bought at a lower price, should be allowed because it reflects market forces, Chen said.
Chen said that starting next Monday, short-selling would be allowed for companies that make up the Taiwan 50, Taiwan Mid-Cap 100 and Taiwan Technology indexes.
He would then push for allowing short-selling of all stocks in Taiwan, where the benchmark index of 681 companies had dropped 48 percent since Jan. 1.
HK firms slam new rules
Hong Kong-listed firms and tycoons yesterday criticized new measures aimed at making insider trading more difficult, saying the restrictions could force firms to relocate.
More than 250 companies and individuals signed a letter published in local newspapers that protests plans to extend the period banning directors from trading shares in their firms.
The new rule, due to come into effect on Thursday, will extend the current one-month blackout period that begins four weeks before the company’s earnings announcement to up to seven calendar months.
For firms reporting quarterly results, the blackout period would last for up to nine months under the change.
“Not only will this amendment damage the continued viability and health of the Hong Kong market, it will also undermine the legitimate rights and functions of directors as investors,” the letter said.
“As a result, companies already listed in Hong Kong might relocate to other markets and those contemplating a listing here might decide to list elsewhere,” it said.
The letter said the move would “inflict damage on Hong Kong’s status as an international financial center” and jeopardize “an important source of market liquidity and stable support for shareholder value.”
It drew the signatures of some of Hong Kong’s biggest firms, including Shun Tak Holdings (信德集團), headed by Macau gambling tycoon Stanley Ho (何鴻燊), and Cheung Kong (Holdings) (長江實業), controlled by Li Ka-shing (李嘉誠).