Wed, Nov 01, 2000 - Page 17 News List

TAIEX could plummet to 5,000 again, analysts say

By Stanley Chou  /  STAFF REPORTER

With political tensions at their highest level since the DPP administration took office, the nation's main stock index is likely to test 5,000 as early as Friday, analysts say.

The TAIEX shed another 114.9 points yesterday, or 2 percent, finishing the day at 5,544.18 on turnover of NT$64.7 billion.

As many as 349 shares dropped limit-down, or 3.5 percent, on the main board, while another 181 shares on the TAISDAQ also fell their maximum daily limit.

Stocks were hurt from the outset yesterday, as investors have been worried about the move in the Legislative Yuan to recall President Chen Shui-bian (陳水扁).

The confrontation between the DPP and opposition political parties has destroyed investor confidence; with a least 146 legislators supporting a recall of the president -- and with a vote on the issue possible as early as Friday -- investors are beginning to fear the worst.

"The TAIEX is likely to test 5,000 by Friday," said Liu Kai-pin (劉凱平), president of SinoPro Securities Investment Consulting. "Whether the 5,000 level can stop the TAIEX from declining further depends on political developments."

Liu warned that if the recall motion passes, the TAIEX could drop another 1,000 points.

Other analysts agreed with the gloomy outlook.

Henry Cheng (鄭百亨), managing director of Manulife Fund Direct, said there's a chance the TAIEX may decline to 5,000 and bounce back to 6,000 from there.

But then again, there's also a chance the TAIEX could break the 5,000 floor and continue dropping if the market's turnover is less than NT$80 billion.

If that's the case, Cheng warned, "a prolonged bearish market" could lay ahead.

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