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Taiwan's share in market irregularities drops

TAIPEI, Taiwan -- The Taiwan Financial Services Roundtable (TFSR) chief yesterday said the incidence of default in settlement and insider trading has declined markedly, saying that it is a great improvement to Taiwan's equity market.

TFSR Chairman Lee Sush-der (李述德) appeared at a pre-event news conference yesterday. On the sidelines of the event, Lee told local media that eased restrictions of day-trading will not only provide investors with a mechanism to manage risks, but also will help elevate trading stability on Taiwan's share market. Lee is also the chairman of Taiwan Stock Exchange.

Reported cases of default in settlement and insider trading have seen a significant decrease, also signs Lee called progress for Taiwan's share market.

Vaulted by the financial sector, the weighted index on the Taiwan Stock Exchange ended up 10.78 points, or 0.11 percent, at 9,530.98 on turnover of NT$100.33 billion.

Lee said that the daily turnover has expanded and stands firmly above the NT$100 billion mark after day-trading was further relaxed on June 30.

While the electronics sub-index closed down 0.12 percent, the financial sector ended up 0.99 percent to prevent the index from finishing in negative territory.

Because the local market staged a strong rebound in the first half of the year, financial institutions are expected to report higher gains from their equity investments, according to analysts.

Liquidity not from Property Market

Lee dismissed the speculation that market liquidity was recently boosted by the central bank's new measures to curb the price surge of the real estate market.

TFSR's board of directors' meeting will convene this Friday to evaluate proposals from all sectors of society to overhaul Taiwan's financial industry and its re-structuring.

Local media reported that TFSR will compile the substance of the meeting into a white paper whereby ideas about consolidation of Taiwan's financial industry and the opening of Taiwan's financial products will be included. The white paper is expected to be published on July 18.

Under the supervision of the Financial Supervisory Commission and the Ministry of Finance, the first case of consolidation between two state-invested banks will be launched at the end of this year.

TFSR was established in May 25, 2005 under the auspices of the FSC. Patterned after the U.S. Financial Services Roundtable (FSR), TFSR represents 22 financial industry associations, with the mission to assist the government in guiding the financial services industry along a robust growth path.

Lee stated that this move is to help one or two local banks grow into regional players within three to five years through consolidation.

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