Tue, Nov 07, 2000 - Page 17 News List

Share market captivated by local politics

EQUITIES The finance minister said that since `trouble has disappeared,' it's time for the 7 percent lower limit to be reinstated. Nevertheless, investors are still holding their breath over the recall vote against the president

By Stanley Chou  /  STAFF REPORTER

The Minister of Finance said there will be no extension of last month's halving of the market's daily downward-volatility limit on share prices, with the limit reverting back to 7 percent tomorrow.

"Last month's adjustment on the downward-limit on share prices to 3.5 percent will not be continued," Minister of Finance Yen Ching-chang (顏慶章) said yesterday.

"Because the reason for the stock market trouble has disappeared," Yen said, referring to the cancellation of the Fourth Nuclear Power Plant, there is no need to continue the temporary measure.

"The measure was originally implemented because the ministry was trying to prevent unreasonable selling pressure. The measure was not used to revive the market," Yen said.

"If investors expect positive news, the conclusion of the economic development meeting [held over the weekend] should be the best bullish news. However, if there is any irregular volatility in the stock market this week, the ministry may still take necessary measures," Yen said.

Because the Legislative Yuan is going to propose an amendment to recall the president today, the stock market has been consolidating in a narrow range. The TAIEX declined 18.38 points yesterday and closed at 5,658.92 on turnover of NT$61.8 billion. Most local retail investors stayed on the sidelines.

President Chen Shui-bian (陳水扁) on Sunday made a public apology for recent domestic political confrontations, but it remains to be seen whether opposition legislators will accept Chen's gesture and halt the recall motion.

"Until the present political deadlock is over, the TAIEX is likely to consolidate between 5,500 and 6,000 points," said Liu Kai-pin (劉凱平), president of SinoPro Securities Investment Consulting. "If turnover tops NT$100 billion and the recall motion is abandoned, the TAIEX is still unlikely to rise much above 6,000 points."

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