Staff Writer, with Agencies

Fri, Jun 24, 2011 - Page 11

US Fed remarks hurt TAIEX

The TAIEX fell yesterday as investor confidence was undermined by downbeat comments from the Federal Reserve about the US economy, dealers said.

The TAIEX closed down 53.76 points, or 0.62 percent, at 8,567.28, after moving between 8,559.33 and 8,619.39 on turnover of NT$87.99 billion (US$3.04 billion).

The plastics and chemicals sector suffered the heaviest losses, finishing down 0.96 percent, led by Formosa Plastics Corp (台塑), amid concerns over slowing demand from the China market. Formosa Plastics fell 2.57 percent to end at NT$98.40.

Yageo shares plummet

Shares in Yageo Corp (國巨), an electronics component maker, fell by their down-limit yesterday after the Ministry of Economic Affairs rejected a Kohlberg Kravis Roberts & Co (KKR)-backed takeover of the company, dealers said.

The shares ended the day at NT$12.75 (US$0.44).

The Investment Commission on Wednesday rejected an application from Orion Investment Co (遨睿投資), a joint venture between KKR and Yageo founder Pierre Chen (陳泰銘), to acquire Yageo through a tender offer. The commission said it was concerned by the lack of transparency in deciding the acquisition price and possible deterioration of the company’s capital structure.

Central Bank rebuts MSCI

The central bank said yesterday that the inward and outward flow of foreign capital investment into the Taiwan Stock Exchange, as well as the exchange rate of the New Taiwan dollar, are completely free.

The bank’s statement was in response to a statement by Morgan Stanley Capital International Inc’s (MSCI) on Wednesday that the nation’s stock market was not upgraded to “developed market” because it still lacked full -currency convertibility.

“The local currency market’s lack of full-time convertibility is coming from the practical consideration that the NT dollar is not international reserve money,” the bank said.

Uni-President counting losses

Uni-President Enterprises Corp (統一企業), the nation’s largest food producer, expects to incur losses of NT$340 million from the return, disposal, refund and compensation for products contaminated with plasticizers, the company said in an exchange filing yesterday.

Uni-President also plans to sell stakes in three Chinese ventures to Carrefour China Holdings BV for 110 million yuan (US$15.4 million), the company said.

FCB signs deal with ICBC

First Commercial Bank (FCB, 第一銀行), the banking arm of state-run First Financial Holding Co (第一金控) yesterday inked a cooperation agreement with China’s largest lender — the Industrial and Commercial Bank of China (ICBC, 工商銀行) — to cooperate in trade finance and other business areas, First Bank said in a statement.

ICBC, the largest state-owned bank in China, has assets totaling 13.46 trillion yuan and posted 16.6 billion yuan in net profits last year, the statement said. It ranks seventh on Forbes’ list of the world’s biggest public companies.

The memorandum is the fourth such accord First Bank has signed with Chinese banks. It signed similar agreements with Bank of China (中國銀行), Bank of Communications (交通銀行) and Agricultural Bank of China (中國農業銀行).

NT dollar dips

The New Taiwan dollar fell against the US currency yesterday, shedding NT$0.057 to close at NT$28.936. Turnover totaled US$603 million during the trading session, down from US$806 million the previous session.