Despite the National Development Council’s (NDC) business climate monitor flashing “yellow-blue” for the first time in 26 months, indicating sluggish business, local publicly traded companies still reported revenue growth and showed solid fundamentals, Financial Supervisory Commission (FSC) Chairman Thomas Huang (黃天牧) said yesterday.
Huang’s comment came as investors mulled over whether the FSC would implement the short-selling ban on all local stocks after the TAIEX benchmark index continued its downtrend, falling 1.07 percent to 12,788.42 points.
The commission accounts for the business climate monitor when adjusting its policy, but local companies have operated securely, with combined revenues growing about 10 percent year-on-year for the first three quarters, Huang said.
Photo: CNA
The average yield of local stocks stands at 5.34 percent and the price-earnings ratio tallied 9.4, suggesting that the fundamentals of local stocks are strong, he added.
FSC data show that the monetary valuation of all local and foreign shares held by local financial sectors plunged to NT$2.6 trillion (US$80.88 billion) at the end of last month, down 16 percent from NT$3.1 trillion a month earlier,.
Local banks were the biggest share sellers, off-loading NT$136.5 billion of local shares last month, while local brokerages sold about NT$3.7 billion of local shares, the commission’s data showed.
Only local life insurance companies bought more local shares last month. The combined valuation of local shares held by local life insurers dropped to NT$1.59 trillion at the end of last month, the lowest in 30 months, the commission’s data showed.
Turnover in local stocks totaled NT$172.7 billion yesterday, while foreign institutional investors sold a net NT$11.85 billion of local shares, with weighted stocks such as Taiwan Semiconductor Manufacturing Co (台積電), MediaTek Inc (聯發科) and Evergreen Marine Corp (長榮海運) suffering the brunt, Taiwan Stock Exchange data showed.
Foreign institutional investors sold a net NT$10.4 billion of local shares this week, much less than NT$50.24 billion a week earlier, the data showed.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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