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Sanctions Fears May Weaken Taiwan Stocks : Trade: The U.S. has cited the country as one of the worst violators of American intellectual property rights.

April 26, 1993|From Bloomberg Business News

TAIPEI, Taiwan — Taiwan's stock index is likely to slide toward 4,500 early this week in advance of a final U.S. listing of countries to be investigated for violation of American intellectual property rights, analysts said.

"Prices generally will be weak and the index will fall toward at least 4,500 over the next few days until the U.S. trade problems are cleared up," said Eric Ni, an analyst with Taipei International Securities.

The U.S. trade representative's office will publish an annual review of countries that violate the property rights.

Taiwan, cited by the United States as one of the worst violators last year, could face immediate sanctions if Washington finds that it failed to live up to past promises to improve protection.

Taiwan's legislature last week ratified a disputed 1989 copyright treaty with the United States. Taiwan had pledged to pass the treaty as part of an agreement by which it escaped trade sanctions.

Action on the copyright treaty makes it unlikely the United States will adopt what would otherwise be certain trade sanctions against Taipei, economics ministry officials said.

Investors are nonetheless worried that the country will be cited for other problems, and stock market activity will be weak until after the report's details are known, analysts said.

In Friday's trading, the weighted price index lost 6.94 points to 4562.31 on volume of $1.26 billion.

The index opened higher on the strength of steel stocks expected to benefit from higher domestic prices this quarter, analysts said.

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