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Speculation in real estate in crosshairs as gov't takes action

TAIPEI, Taiwan -- Governing bodies yesterday congregated to devise measures to combat a shift in investment activities from residential to industrial properties observed among real estate speculators.

The Central Bank, R.O.C., the Ministry of Economic Affairs (MOEA, 經濟部) and the Financial Supervisory Commission (FSC, 金管會) are mulling over policies that will tangibly deter speculators from hyping up the price and investment prospects of industrial-use land parcels.

Reports indicate that the MOEA intends to amend the Act for Industrial Innovation (產業創新條例) to address rampant speculation of industrial land parcels. According to reports, the MOEA amendments will reserve the right for the government to repurchase industrial-zoned land parcels situated near urban centers that have been lying idle for two years. Land parcels whose owners have not applied for construction permits, or have made no tangible development progress in two years, will be flagged under the new initiative, according to reports.

FSC Chairman Tseng Ming-chung (曾銘宗) yesterday pledged that the commission will cooperate fully with the MOEA and the central bank in the initiative.

Tseng Expresses Conservatively Upbeat Outlook

Meanwhile, as listed companies across Taiwan report their performance over the first half of this year, Tseng yesterday changed his outlook on the local market from “cautiously optimistic” to “conservatively optimistic.”

According to Tseng, Taiwanese enterprises listed on the Taiwan Stock Exchange and the GreTai Securities Market accumulated profits of NT$447.6 billion over the first half of this year, improving by 21.6 percent year-on-year. Although the immense trading volume commanded by foreign institutional investors heavily influences the local market, international investors should receive the stellar performance of Taiwanese enterprises favorably, said Tseng. In addition, Tseng stated that he expects Taiwan's economic growth to maintain at above 3.5 percent, with chances to reach 3.5 percent over 2015.

FSC to Assist in Contending for the 'Asian championship'

Incidentally, reports indicate that Tseng is poised to hold a meeting with eight of Taiwan's leading financial institutions, and discuss how the regulator may help the companies vie for the vast markets of Asia.

Eight of Taiwan's leading financial magnates, namely Cathay Financial Holdings' (國泰金) Tsai Hong-tu (蔡宏圖), CTBC Financial Holding's (中信金) Yen Wen-long (顏文隆), Yuanta Financial Holdings' (元大金) Wang Rong-jou (王榮周), Fubon Financial's (富邦金) Daniel Tsai (蔡明忠), First Financial's (第一金) Tsai Ching-nien (蔡慶年), Mega Financial Holdings' Tsai Yo-tsai (蔡友才), the Bank of Taiwan's (台銀) Lee Chih-chu (李紀珠) and China Development Financial's (開發金) Chen Mu-tsai (陳木在), will be meeting with Tseng tomorrow.

According to reports, Tseng is poised to conduct a dialogue with the eight financial sector chiefs, and receive their appeals with the intent of furnishing assistance aimed at producing swift and tangible results in expanding earnings derived from Asian markets abroad. Most notably, Tseng reportedly will render aid to the eight financial institutions on a case-by-case basis to expedite ongoing initiatives.

To aid the companies' efforts in the pan-Asian markets, the FSC may loosen a number of regulatory hurdles including the lowering of risk-based capital ratio requirements and revising capital charge rates for brokerage firms.

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