The Finance Committee in the Legislative Yuan gave preliminary clearance to rule revisions to halve the securities trading tax rate to 0.3 percent from the existing 0.6 percent for the period of six months as proposed by the Cabinet.

But lawmakers of the ruling Kuomintang have to overcome the strong opposition from their colleagues of the Democratic Progressive Party.

The effect of the bill to help revive sagging stock transactions will be muted if the legislative procedure drags on for too long, according to analysts.

There are still other short-term and provisional measures in the government’s arsenal, including halving the daily rising and falling limit to 3.5 percent for individual shares from the present range of 7 percent.

The government may consider lowering the borrowing costs for investors and a shaving in the service charge on share transactions, some of the analysts said.

Some of them suggested that the government should increasingly use the investment funds under its control to support the market.

The capital infusion should be strategically focused on the blue chips that are regularly seen as the bellwethers of the market trends, they said.

Officials declined to reveal what major actions they plan to take, saying all possible options are presently under consideration.

The reactions of the international financial markets to the latest concerted measures adopted by the finance chiefs of the major industrialized nations as well as officials from the World Bank and the International Monetary Fund (IMF) at the weekend meeting held in Washington will be closely monitored when the market opens tomorrow, they said.

Like officials in other nations, they said confidence remains a key factor.

CBC Governor Perng Fai-nan stressed that Taiwan economy only encounters the problem of “slowdown, but no recession.”

Finance Supervisory Commission Chairman Chen Shu urged investors in Taiwan not to bungle their investment strategies under irrational decisions.

Speaking on the National Day, President Ma Ying-jeou told the public that he was confident the nation would weather the global financial crisis.

In spite of officials’ rhetoric, analysts said the coming week will be another major test for officials and investors as the local stock market will be influenced by the performance of the international financial market.

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