Feb. 7 (Bloomberg) -- Taiwan’s dollar strengthened as foreign investors added to holdings of local stocks on optimism the island’s economic growth is intact. Government bonds dropped.
Global funds bought $220 million more Taiwanese stocks than they sold today, according to exchange data. The island’s statistics bureau forecast last week the economy will grow 3.91 percent in 2012, compared with a 4 percent expansion last year. The local currency has rallied 2.4 percent against the dollar this year.
“There’ve been foreign investors coming into Taiwan’s markets trying to profit from the Taiwan dollar’s appreciation,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei.
The Taiwan dollar strengthened 0.1 percent to NT$29.570 against its U.S. counterpart, according to Taipei Forex Inc. The currency touched NT$29.415 on Feb. 4, the strongest level since Sept. 13.
The yield on the government’s 1 percent notes due January 2017 rose one basis point, or 0.01 percentage point, to 0.936 percent, prices from Gretai Securities Market show.
Benchmark 30-year yields were steady at 1.87 percent before a NT$35 billion ($1.2 billion) sale of securities of that maturity tomorrow. The debt will yield 1.865 percent, according to the median estimate of bond traders in a Bloomberg survey.
“The result of tomorrow’s bond sale largely depends on the appetite of insurers, who are the biggest buyers of long bonds,” Hsing said.
The overnight money-market rate, which measures interbank funding availability, was little changed at 0.398 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 firstname.lastname@example.org
To contact the editor responsible for this story: Sandy Hendry at email@example.com