The local stock market rose to a 13-month high and the NT dollar gained yesterday as a new Cabinet increased confidence and an official said the signing of a financial industry agreement with China was “on track.”
The benchmark TAIEX advanced 81.36, or 1.12 percent, to close at 7,332.08, the highest since July 24 last year. Cathay Financial Holding Co (國泰金控) climbed to a three-month high of NT$53.30, while Fubon Financial Holding Co (富邦金控) surged to NT$35.30, its highest in 15 months.
The NT dollar gained 0.3 percent to end at NT$32.649 versus the greenback, Taipei Forex Inc data showed.
“Sentiment was boosted by the possible signing of a memorandum of understanding with China, but that is not enough to support the market for long,” said Alex Huang (黃國偉) of Mega International Investment Services (兆豐國際投顧).
Huang expected the market to consolidate in the 7,200 to 7,500 range in the next few days.
New Premier Wu Den-yih (吳敦義) named Shih Yen-shiang (施顏祥), chairman of the state-run oil refiner, CPC Corp, Taiwan (台灣中油), as minister of eonomic affairs, and appointed Tsai Hsung-hsiung (蔡勳雄), a minister without portfolio, as head of the Council for Economic Planning and Development. Minister of Finance Lee Sush-der (李述德) was reappointed to his post.
“The new appointments are names we are familiar with, so investors know their work,” said Parker Wu (吳年恭), who helps oversee the equivalent of US$44 million at the Agriculture Bank of Taiwan (台灣農業金庫). “We care most about cross-strait relations. If they can show they can push relations forward, it will boost the market.”
Taiwan is aiming to sign a financial memorandum of understanding before the end of the year, Lu Ting-chieh (盧廷劼), chief secretary at the Financial Supervisory Commission (FSC) said by telephone.
China and Taiwan may sign a financial memorandum of understanding “soon,” the Chinese-language Economic Daily News reported yesterday, citing an unnamed FSC official. An accord would allow more investment in each other’s banking, insurance and securities industries.
“The improving relationship between Taiwan and the mainland is going to boost Taiwan’s currency,” said Tomo Kinoshita, an economist at Nomura Holdings Inc in Hong Kong. “We see a positive element rising, which is Taiwan’s exports to China.”
ADDITIONAL REPORTING BY AFP
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