| TAIPEI, April 26
TAIPEI, April 26 Huang Cheng-chan buys about
100 Chinese yuan ($14.6) every month from his bank in Taipei
but has no plans to visit China. He plans to profit instead.
Huang and countless other Taiwan day traders known for
their adventurism are buying the Chinese currency as an
investment despite caution warnings because they expect it to
appreciate any day, bank sources say.
"Mainland China is an increasingly viable new trade market,
and the price used to be seven Taiwan dollars to one yuan
whereas it's now about four to one, so I think the odds of it
rising are pretty ominous," said Huang, 27, a securities worker
Yuan deals over the past two months in Taiwan have
escalated, causing some banks to run short of Chinese cash. The
surge comes as foreign governments worried about their export
competitiveness pressure economic powerhouse China to revalue
Yuan exchanges were legalised on the investment-crazy
island only late last year when Taiwan and China allowed them
as part of a flurry of trade pacts following decades of
Taiwan's semi-official Central News Agency called recent
yuan buying a "shopping spree for the currency in anticipation
of an appreciation this year" and said the "fad" had led to
Purchases by individual Taiwanese account for most of the
120 million yuan sold every month by Mega International
Commercial Bank, said Lee Hai-fong, a bank vice president.
Mega ran short of the red-and-white Mao Zedong-stamped cash
in mid-April when Chinese President Hu Jintao met U.S.
counterpart Barack Obama for talks that many expected to yield
signals on when the yuan would appreciate, Lee said.
But resupplies are easy, as Taiwan banks can get more yuan
from China, while profits for the punters are less certain.
"Customers can buy and sell as they like, but our judgment
is that the yuan won't appreciate that much," Lee said.
Unless the yuan rises by more than 2 or 3 percent as widely
expected, bank service charges would cancel out any gains once
yuan holders tried to sell back their cash, dealers say.
"It's pretty stupid if you buy it from banks," one forex
dealer with a foreign bank in Taipei said.
But Huang has massed 2,000 yuan and plans to save about
20,000 before thinking to resell it. Some of his family members
have acquired about 40,000 yuan, he said.
"There should be a chance in Taiwan to sell it," Huang
(For yuan stories: [ID:nSGE63J00U])
(For factbox on yuan forecasts: [ID:nTOE63L02W])
(Editing by Sugita Katyal)