TAIEX closes higher
Taiwan share prices closed 0.46 percent higher yesterday although gains were capped by profit-taking after recent rallies, dealers said. The TAIEX index closed up 31.98 points at 6,985.32 on turnover of NT$145.15 billion (US$4.53 billion). Risers led decliners 1,282 to 960, with 226 stocks unchanged. The index reached a psychological resistance level of 7,000 points on gains led by financial stocks in early trade but was pulled back by profit-taking, dealers said. “The trading volume was not sufficient enough to push the index past 7,000 points. It would require at least NT$200 billion” to achieve this end, said Alex Huang (黃國偉) of Mega International Investment Services (兆豐國際投顧).
Banks to re-buy minibonds
Fubon Bank (Hong Kong) (富邦香港) said yesterday it and 15 other banks in Hong Kong have agreed to repurchase the so-called minibonds sold by the defunct Lehman Brothers from investors. Fubon Bank (Hong Kong), a subsidiary of Fubon Financial Holding Co (富邦金控) of Taiwan, said in a statement that it would pay 60 percent in face value of the bonds to investors to buy back the Lehman products. The lender said it estimated the buyback would cost it HK$313 million (US$40 million) but stressed no concern for capital shortage. The 16 banks’ repurchase move came after they reached an agreement with Hong Kong’s Securities and Futures Commission and Hong Kong Monetary Authority to compensate minibond buyers. Lehman’s bankruptcy last year caused the value of the minibonds to collapse, with many of these investors being elderly and poorly educated people.
China Steel may post profit
China Steel Corp (中鋼), the nation’s largest steel mill, said it may post a third-quarter operating profit as demand from automakers and appliance makers improves. The company may raise prices for September, Executive Vice President Chung Le-min (鍾樂民) said yesterday in an interview. Customers are placing more orders on expectation prices will increase as the global economy may have bottomed, he said. China Steel joins rivals including South Korea’s Posco and China’s Baosteel Group Corp. in indicating the worst may be over for global steel demand. On Tuesday, the company said it had a pretax profit of NT$774 million ($24 million) for the second quarter, after reported losses for the six months to March. “Demand has improved from industries such as automakers,” Chung said. Lower material costs are also helping, he said.
Work to start for next month
Construction of the Taiwan pavilion at the Shanghai World Expo 2010 will begin in the middle of next month, the semi-official Taiwan External Trade Development Council (TAITRA, 外貿協會) announced on Tuesday. TAITRA Secretary-General Chao Yung-chuan (趙永全), in his capacity as general manager of the Taipei World Trade Center, signed the contract a day earlier in Shanghai with Hung Hao (洪浩), chief of the Shanghai World Expo Bureau. According to the Shanghai World Expo Bureau, 240 countries have decided to take part in the event that will run from May 1 to Oct. 31 next year. Some participating countries have already started construction of their pavilions.
NT dollar loses ground
The New Taiwan dollar lost ground against the US dollar on the Taipei Foreign Exchange yesterday, declining NT$0.076 to close at NT$32.875. Turnover was US$604 million.