* Taiwan proposes easing of stock trade tax rules
* Stock inflows, exporters support Taiwan dlr
* Malaysia grows 4.1 pct in Q1, slowest in more than 3 years
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, May 16 (Reuters) - The Taiwan dollar rose on
Thursday as a proposal to ease rules on stock trading capital
gains tax lifted local stocks, while the Malaysian ringgit slid
after first quarter growth missed expectations, leading losses
among emerging Asian currencies.
Taiwan's currency gained up to 0.6 percent on stock
inflows from foreign financial institutions, although demand was
relatively mild, traders said. Exporters' bids for settlements
also helped the local unit.
Taiwan's ruling party lawmakers have proposed easing rules
on a new capital gains tax in a bid to boost activity in the
island's stock market, one of the lawmaker said earlier.
With the proposal, the main stock index ended up 0.9
percent at the highest close since Aug. 3, 2011.
"That has helped encourage inflows and may limit the Taiwan
dollar's weakness ahead of 30.000 (per U.S. dollar)," said
Jonathan Cavenagh, a senior FX strategist at Westpac in
Singapore, although he maintains a bearish view on the currency
saying stock inflows may slow down on weak economic data.
On May 8, Taiwan's government said it would cut this year's
economic growth forecast later this month due to sluggish
Its exports shrank unexpectedly in April and first quarter
growth was far slower than expected.
With the gloomy economic picture, the Taiwan dollar has lost
2.7 percent against the greenback so far this year, becoming the
second worst performing emerging Asian currency after the South
But foreign investors have bought nearly T$70 billion ($2.3
billion) in Taiwan stocks so far this month, compared with a
combined net purchase of some T$44 billion during the first four
months of the year, according to Taiwan Stock Exchange data.
Some foreign investors see potential for more gains in
Taiwan shares, analysts said, as they underperformed last year
with an 8.9 percent gain when Asia-Pacific shares outside Japan
jumped 18.6 percent.
The ringgit fell as data showed late on Wednesday
Malaysia's economy grew 4.1 percent in the first quarter, its
slowest pace in more three years, missing expectations on weak
The current account surplus during the January-March period
also narrowed from the previous quarter, central bank data
"The market was looking for long dollar positions for
3.02-3.03," said a senior Malaysian bank trader in Kuala Lumpur,
referring to the ringgit's level to the greenback before a
general election earlier this month.
Last week, the ringgit rose 1.6 percent against the dollar,
its largest weekly gain since the week ended Sept. 14 2012, as
the ruling coalition's victory eased worries about political
uncertainty and policy discontinuity.
But some investors, including real money funds, on Thursday
bought the Malaysian currency on dips, while some interbank
speculators covered short positions, traders said.
The Singapore dollar fell as much as 0.4 percent to
1.2507 to the U.S. dollar, its weakest since March 22, on
supplies from interbank speculators and hedge funds.
Earlier, the city-state's currency turned higher helped by
demand from Japanese and U.S. investors.
But it headed south again on the greenback's broad
The Singapore dollar may head to 1.2529, its weakest in
2013, traders said.
Investors are keeping an eye on April export data due on
Singapore's non-oil domestic exports in April likely dipped
1.9 percent from a year ago as shipments of PC components and
other electronics parts, although recovering, remain below the
levels seen 12 months ago, a Reuters poll showed.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0620 GMT
Currency Latest bid Previous day Pct Move
Japan yen 102.37 102.24 -0.13
Sing dlr 1.2496 1.2455 -0.33
Taiwan dlr 29.938 30.028 +0.30
Korean won 1116.20 1114.50 -0.15
Baht 29.69 29.71 +0.07
Peso 41.23 41.20 -0.07
Rupiah 9755.00 9745.00 -0.10
Rupee 54.77 54.78 +0.02
Ringgit 3.0140 3.0020 -0.40
Yuan 6.1488 6.1459 -0.05
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 102.37 86.79 -15.22
Sing dlr 1.2496 1.2219 -2.22
Taiwan dlr 29.938 29.136 -2.68
Korean won 1116.20 1070.60 -4.09
Baht 29.69 30.61 +3.10
Peso 41.23 41.05 -0.44
Rupiah 9755.00 9630.00 -1.28
Rupee 54.77 54.99 +0.40
Ringgit 3.0140 3.0580 +1.46
Yuan 6.1488 6.2303 +1.33
($1 = 29.8780 Taiwan dollars)
(Additional reporting by Jeanny Kao, Clare Jim in TAIPEI and
IFR Markets' Catherine Tan; Editing by Jacqueline Wong)