Market expected to shake off worries

Local and foreign business groups said yesterday that post-election political turbulence would be short term and wouldn't fundamentally hurt the nation's economy.

"I think basically, the perspective of Taiwan's economy is good," European Chamber of Commerce Taipei (ECCT) Chairman Dirk Sanger told reporters after meeting with Minister of Economic Affairs Lin Yi-fu (林義夫) yesterday afternoon.

Lin yesterday met foreign and local business groups including the ECCT, the American Chamber of Commerce (AmCham) in Taipei, the Japanese Chamber of Commerce and Industry in Taipei and six major local business associations.

While Sanger said that election controversy and resulting fluctuations in the stock market were common in democratic countries, he acknowledged that the uncertainty would influence investment decisions if the disputes drag on.

Shintaro Ishimaru, a director of the Japanese Chamber of Commerce and Industry in Taipei, expressed confidence in Taiwan's democracy and economic strength.

While various data suggest that Taiwan will enjoy robust economic growth this year, local business groups yesterday called on the government to activate the NT$100 billion National Stabilization Fund (國安基金) to stabilize the stock market.

"The Ministry of Finance should consider using the fund today [Tuesday] to curtail the decline to 3.5 percent," said Rock Hsu, (許勝雄) president of Taiwan Electrical and Electronic Manufacturers Association (TEEMA, 電電公會).

The TAIEX yesterday plunged 6.7 percent to 6,359.92. The government said earlier that it was considering using the fund to support the bourse, if irrationality damaged market sentiment. But institutional investors said the index's more than 450-point decline was expected and the government may stay on the sidelines.

Theodore Huang (黃茂雄), chairman of the Chinese National Association of Industry and Commerce (CNAIC, 工商協進會), said the short-term outlook for the stock market was worrisome and he hoped the election dispute could end as soon as possible.

TEEMA, CNAIC, the Chinese National Federation of Industries (全國工總), the General Chamber of Commerce (全國商業總會), the National Association of Small & Medium Enterprises (中小企業協會) and the Taiwan Federation of Industry (工業協進會) yesterday released a joint statement calling on the government to take emergency measures to stabilize the stock market, including halving the 7 percent daily down-limit.

"In the wake of abnormal fluctuations in the stock market, [we] suggest the government use the National Stabilization Fund at an appropriate time to support the market, and temporarily halve the 7 percent daily down-limit to 3.5 percent," they said.

Wang Yung-ching (王永慶), chairman of the Formosa Plastics Group (台塑集團), expressed a similar wish yesterday, saying the TAIEX will rebound to 9,000 points with the efforts of all the people. Wang, who has long advocated direct cross-strait transportation, said he was willing to be a special envoy between the two sides under the government's instruction.