Fri, Jul 29, 2011 - Page 11 News List


Staff Writer, with Agencies

TAIEX drops on US woes

The TAIEX sank yesterday amid cautious sentiment over the US’ continuing debt crisis as negotiations between the White House and Congress to raise the debt ceiling remained stagnant, dealers said.

The TAIEX closed down 50.29 points or 0.57 percent at 8,767.20 after moving between 8,702.84 and 8,790.68 on turnover of NT$140.79 billion (US$4.89 billion).

The machinery and electronics sector suffered the heaviest losses, finishing down 1.1 percent, while foodstuffs rose 1.1 percent, followed by plastics and chemicals that added 0.8 percent.

Bond sale yield beats forecasts

The government sold NT$30 billion of 20-year bonds at a yield of 1.975 percent yesterday, higher than forecast by traders surveyed by Bloomberg.

The sale of the securities maturing in August 2031 attracted bids for 1.55 times the amount on offer, the central bank said in a statement. The yield compared with the 1.945 percent median estimate in a Bloomberg News survey of six finance companies.

The government last sold 20-year debt in May at a yield of 1.804 percent. That offer had a bid-to-cover ratio of 1.9 times.

The securities industry was the biggest buyer at yesterday’s auction, taking 34.5 percent of the total issuance, surpassing the insurance industry as the biggest holder of new 20-year debt.

Central bank cautions lenders

The central bank yesterday warned lenders to be mindful of risks of consumer loans and mortgages.

Banks shouldn’t cut interest rates to win customers, it said in an e-mailed statement.

Bad loan ratio hits new low

The nation’s bad loan ratio dropped to a new low of 0.48 percent at the end of last month, compared with 0.5 percent a month earlier, the Financial Supervisory Commission said yesterday.

Non-performing loans totaled NT99.5 billion last month, down NT$3.9 billion from NT$103.4 billion in May, increasing the coverage ratio to 199.13 percent, from 187.36 percent, the commission said.

Of the 37 domestic lenders, only one had a bad loan ratio higher than the 2 percent mark, commission said, adding it would step up inspection on the lagging bank.

Aggregate outstanding loans reached NT$20.71 trillion last month, growing NT$27.2 billion from May, it said.

Taiwan Mobile to cut shares

Taiwan Mobile Co (台灣大哥大) yesterday said its board approved a proposal to cut share capital by 10 percent by canceling 380 million shares from its outstanding shares.

The capital reduction aimed to boost shareholder interest, the nation’s No. 2 telecoms operator said in a filing to the Taiwan Stock Exchange. Shareholders will be paid NT$1 per share in cash on Oct. 13.

After the reduction, Taiwan Mobile’s share capital will decline from the current NT$38 billion to NT$34.21 billion.

The company’s board of directors also approved a proposal for NT$7.3 billion in capital spending this year and the formation of a compensation committee to oversee the management salary and rewards, according to the filing.

NT dollar slides

The New Taiwan dollar fell against the US currency yesterday, shedding NT$0.043 to close at NT$28.845 on a technical correction, dealers said.

The TAIEX’s decline on foreign institutional selling after a dive on Wall Street overnight added downward pressure on the NT dollar, they said.

Turnover totaled US$769 million during the trading session, up from US$693 million the previous session.

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