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Taiwan Bonds Rise After Ma Wins Second Term; Local Dollar Falls

Jan. 16 (Bloomberg) -- Taiwan’s government bonds rose on speculation global funds were adding to holdings after President Ma Ying-jeou was elected for a second term. The local dollar fell on concern Europe’s debt crisis will curb global growth.

Ma, whose first term was characterized by the pursuit of closer ties with China through trade agreements, defeated the Democratic Progressive Party’s Tsai Ing-wen by a 6 percentage point margin. The Bloomberg-JPMorgan Asia Dollar Index dropped for a second straight day after Standard & Poor’s stripped France of its top rating and downgraded eight other European nations.

“We’re seeing some foreign funds buying bonds after Ma’s win,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Investors are waiting for some buying opportunities.”

The yield on the 1 percent notes due January 2017 fell one basis point, or 0.01 percentage point, to 0.96 percent, prices from Gretai Securities Market show. The rate dropped three basis points last week.

The Taiwan dollar weakened 0.2 percent to NT$30.070 against its U.S. counterpart, according to Taipei Forex Inc. It earlier advanced as much as 0.1 percent.

The overnight money-market rate, which measures interbank funding availability, was little changed at 0.4 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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