Shares close down 0.55%
Taiwanese shares closed down 0.55 percent yesterday as large-cap electronic stocks led the downside on profit-taking, dealers said.
The weighted index fell 25.39 points to 4,628.24 on turnover of NT$78.49 billion (US$2.26 billion).
The market opened down as investors pocketed recent gains in high-tech stocks and the losses extended amid lingering concerns over a global economic meltdown, dealers said.
“The local bourse had appeared resilient compared with its foreign counterparts. Today’s losses reflected technical factors,” Capital Securities (群益證券) analyst Chen Yu-yu (陳育娛) said.
“Large cap electronic stocks which were the driver of the recent gains suffered the most,” Chen said.
Construction works prioritized
Public Construction Commission (PCC) Chairman Frank Fan (范良銹) said yesterday that the goal for public construction this year was to spend at least 90 percent of the allotted budget to bolster the economy.
To expand domestic demand amid the global economic downturn, the budget for construction work this year is a record NT$599.6 billion (US$17.225 billion).
The funding is composed of about NT$405.3 billion from the government’s annual budget, NT$150.6 billion from a four-year special budget pending legislative approval and NT$43.7 billion reserved from last year’s budget for infrastructure projects.
The commission said this year’s budget was far higher than between 2004 and last year, when it ranged between NT$363.5 billion and NT$481.6 billion.
“Despite the major increase in scale, it is still within the capacity of the country’s construction industry, engineering consultant firms and technician industry,” Fan said.
Fan said the government would ensure sufficient supplies of mechanical instruments and materials such as gravel, steel and cement.
Central bank denies ‘barrier’
Central bank Governor Perng Fai-nan (彭淮南) yesterday denied the existence of a trade limit referred to in media reports as “Perng’s barrier.” Reports have said Perng would not allow the New Taiwan dollar to trade below NT$35.3 to the US dollar.
Perng said he respects the market mechanism although he may receive telephone calls and letters asking the central bank to boost or weaken the NT dollar.
A currency cannot depreciate and appreciate at the same time, Perng said, adding that the nation’s monetary policy was loose enough, as illustrated by the significant excess reserves.
Perng also denied reports that he fought against the use of foreign exchange reserves to finance public construction projects, insisting that any proposal to touch the reserves must have a legal basis.
NT dollar loses ground
The NT dollar fell on concerns that sliding exports will curb the supply of foreign exchange and deepen a recession.
The local currency snapped a four-day advance before a government report that showed exports tumbled for a sixth straight month last month.
The NT dollar fell 0.1 percent to close at NT$34.815 against the greenback, Taipei Forex Inc said. It earlier rose 0.4 percent to NT$34.627, the highest since Feb. 23.
“The government is favoring a weaker currency to help exporters,” said Daniel Soh, an economist at Forecast Pte in Singapore. “Taiwan is a very trade-reliant economy and the central bank is also coming to the end of its rate-cutting cycle, so it all rests with the currency now.”
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