Taiwan’s Financial Supervisory Commission plans to allow securities firms to sell overseas yuan bonds to local institutional investors, Economic Daily News reports, citing officials it didn’t identify.

FSC may also relax rules to let securities firms trade derivatives for non-hedging purposes: report

FSC is lobbying central bank to allow overseas securities units to introduce derivatives linked to Taiwan’s stocks andexchange rate: report

Eoin Treacy's view

While Western media have focused on improving manufacturing data from the USA and UK, Taiwan’s manufacturing data has been equally impressive. The outperformance of its large cap technology sector has recently been supplemented by the return to form of the financial sector on speculation that regulatory overall will open up fresh growth avenues.

The Taiwan Banking Index has rallied impressively from the May lows to hit its highest level since 2008. While somewhat overbought in the short term, a sustained move below 1000 would be required to question medium-term recovery potential.

Please see Comment of the Day on July 7th for a review of some of Taiwan’s larger technology companies.

Considering the fact that Taiwan and South Korea compete in many of the same markets, the recent weakness of the Korean Won following a sustained period of strength is notable. The US Dollar found support against the Won last week, above the psychological KRW1000 area, and a clear downward dynamic would be required to question current scope for an unwinding of the oversold condition relative to the 200-day MA.

The KOSPI Index continues to trade in the region of the upper side of an almost 3-year range and a break in the short-term progression of higher reaction lows would be required to question medium-term potential for a successful breakout.