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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (77)	7/5/2000 8:29:10 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 10065

Talk about market manipulation: Taiwan Announces Stock Support Measures; 2nd Time in a Week Taipei, July 4 (Bloomberg) -- Taiwan's government for the second time in a week rolled out a series of initiatives aimed at boosting sagging prices and moribund trading volumes in the island's stock market. Finance Minister Shea Jia-dong, speaking in a late-night televised news conference and flanked by central government spokeswoman Chung Chin, announced a package of 10 measures and commitments agreed to by the executive branch. Key measures include pledges to accelerate the creation of funds that will buy stocks in traditional manufacturing industries and a promise to avoid raising taxes if possible. The package is the result of an emergency meeting between Premier Tang Fei and the government's top financial officials, including Shea and central bank Governor Perng Fai-nan, according to the CNYes.com news agency. It comes after the island's benchmark stock index today tumbled 3.0 percent, bringing the decline in the past four weeks to 11.7 percent. Average daily trading turnover on the Taiwan Stock Exchange in the past four weeks has shrunk 51 percent from the same period a year earlier. During the emergency meeting, Securities & Futures Commission Chairman Lin Tzong-yeong blamed the stagnant trading on investor concern about rising taxes and other unclear government policies, as well as the impact of funds being siphoned out of the market by fixed-line telecommunications companies and the island's high-speed rail project, the CNYes.com agency reported. Shallow Impact The plan follows an emergency package on June 29 in which the Ministry of Finance adjusted certain financial regulations to make it easier for investors to buy stocks on margin, using borrowed money, while making it more expensive for investors to bet against stocks by selling them short. The latest package will face a tough audience. The last announcement sparked a two-day, 2.2 percent rally that some investors said was fueled mostly by government buying. By today, the third day after the package, stocks were falling again. The measures announced today are also mostly reiterations and clarifications of policies announced previously, with little fresh information. In terms of direct stock-buying stimulus, the government repeated a plan to urge the mutual fund industry to establish funds that will invest in ``traditional industries'' such as non- technology manufacturing. The government committed to having NT$30 billion ($975 million) of such funds set up within three months, and it pledged to use four major state-owned pension and insurance funds to provide the money if the private sector was unable to raise capital fast enough. It also said it would set up unidentified new systems to help ``the four funds better carry out their function of adjusting the market.'' The funds are often used by the government to buy shares in times of falling prices. Tax Relief The plan also addressed taxes, a source of investor concern in recent weeks after Shea and other officials of the six-week old Chen Shui-bian Administration hinted of increases and the closure of loopholes. The plan included a pledge not to raise taxes before exhausting other attempts at streamlining spending. And though the government repeated plans to tax employee stock bonuses at real market prices, a measure technology companies say will reduce Taiwan's competitiveness and raise costs for firms, it pledged ``to coordinate more with high-technology enterprises to avoid striking against investor wishes.'' Remaining measures included pledges to avoid budget-busting social welfare plans, to eliminate more public holidays to balance out the impact of planned 2-day weekends, to avoid rising minimum wages in such a way that it would hurt industry and to avoid certain market monitoring measures that have been opposed by some investors. Jul/04/2000 12:44 ET