Construction shares decline on tax worries;TAIEX down 0.2%

The government said Monday it was considering to revamp the tax system concerning real estate, including levying the capital gains tax based on market transaction prices, with an aim to chill the speculative activities that have continued to drive up property prices.

Tsai Hsung-hsiung, chairman of the Cabinet-level Council for Economic Planning and Development (CEPD), said at the Legislative Yuan Monday he personally supported a review and revision of realty taxes.

He said participants at two recent CEPD meetings on real estate issues generally held the view that realty prices in Taipei City and County are comparatively higher, while other markets in Taiwan are not a major problem.

These remarks caused an overall decline of construction shares in trading yesterday. Among the construction shares that declined were Huang Hsiang, which fell NT$2.7, or 4.53 percent, to NT$56.9; and Prince Housing Development Corp., which fell NT$0.75, or 5.12 percent, to NT$13.9.

TAIEX, the island's benchmark index, meanwhile lost 12.25 points, or 0.2 percent, to 7,322.93 at the close of trade in Taipei. The index's sixth straight decline has made this the longest losing streak since Oct. 13, 2005.

Responding to those concerns, Premier Wu Den-yih yesterday quickly clarified that there were no plans at this stage to increase the housing tax and the incremental land value tax.

“The government will not raise taxes without an increase in wage and an improvement in the unemployment situation,” he said.

He further said home prices were higher only in Taipei City and County. “For homes in the southern city of Kaohisung, many high-quality ones are valued at just NT$60,000 to NT$70,000 a ping,” he said.

He also said there were other ways to correct northern Taiwan's high price situation, including re-districting and urban revitalization.

Also in yesterday's trading, China-themed shares surged on news Tingyi (Cayman Islands) Holding Corp., owner of the famous Master Kang instant noodles brand, plans to sell equity on the island's bourse on better relations with China.

Tingyi plans to offer as many as 380 million Taiwan depositary receipts, backed by 190 million shares, it said in a statement. Tingyi rose 2.9 percent to close at HK$17.90 in Hong Kong trading Monday.

The news caused a surge of China-related shares. These included TaiSun Enterprise, which rose 3.79 percent to NT$13.7, and the Namchow Group, which rose 7 percent to NT$21.4.

Wei Chuan Corp., part of the Tingyi family, dropped by a slight margin of 0.44 percent to NT$44.8. It surged to NT$46.5 at one point of trade.

In other stocks, Chinatrust Financial Holding Co. climbed 0.3 percent to NT$19.85 after Taiwan's largest credit-card issuer was upgraded to “buy” from “hold” at Sinopac Securities.

Evergreen Marine Corp. lost 0.6 percent to NT$16.10, the lowest in three months, after Asia's biggest container-shipping line posted a third-quarter loss of NT$2.58 billion.

Fubon Financial Holding Co. added 2.6 percent, the most since Oct. 9, to NT$38.25 after Henry Lin, President of its Fubon Asset Management Co. unit, said it aims to list two exchange-traded funds in Hong Kong by the end of the year.

Powerchip Semiconductor Corp. added 6.7 percent to NT$3.80, its steepest gain since Oct. 12.

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