Beijing's announcement over the weekend that it would initiate anti-secession legislation could only have a limited impact on the local bourse and such a negative influence is expected to subside in one to two days, a market watcher said yesterday.
"The news is expected to cause jitters on the local bourse and trigger some selling as soon as the trading session starts [today]," said Wu Pei-wei (吳佩偉), a portfolio manager who manages a US$30 million fund for ABN-AMRO Asset Management in Taipei.
Investors' confidence could be further eroded by a decline in Wall Street trading on Friday, which could cause foreign investors to hesitate to pour money into Taiwan's stock market, Wu said.
China's state media reported on Friday that Beijing will introduce legislation against secession, which was deemed as a move aimed at Taiwan. The draft law will be submitted during a session of China's parliament starting on Dec. 25, the Xinhua news agency said.
Prior to this political shock, the nation's stock market last week rebounded with an increase of up to NT$223.84 billion, or 1.66 percent, in the market value of wholly listed companies, which aggregated NT$13.70 trillion, compared to previous week and following the legislative elections, according to statistics by Taiwan Stock Exchange Corp (TSE).
The benchmark TAIEX closed 9.91 points lower on Friday at 6009.32 with a turnover of NT$60.21 billion. The New Taiwan dollar traded at NT$32.36 against the US dollar on Friday, an increase of NT$0.115 from a week earlier, after foreign investors bought a net of NT$16.2 billion worth of Taiwan's stocks last week.
In the long term, China's announcement is not expected to repress Taiwan's economic growth, an economist at Citibank Taiwan said.
"It will not stop domestic investment by Taiwanese companies that have advantages in global deployment and the flexibility to bolster economic growth," Citibank Taiwan vice president Cheng Cheng-mount (
Despite Beijing's intention to reiterate its sovereignty over Taiwan in the international arena and therefore increase political risks across the Taiwan Strait, Cheng said he doesn't expect the latest cross-strait development to have a major impact on foreign direct investment here.
He said foreign investments in Taiwan already shrank years ago, after they shifted to China, the world's largest manufacturing base today.
Taiwan has received foreign investments of US$2.91 billion in the first 10 months of this year, according to figures by the Investment Commission under Ministry of Economic Affairs.
Foreign investment in Taiwan saw an all-time peak in 2000 of US$7.56 billion, and has followed a downward trend since then, accor-ding to the commission's statistics.
Stable cross-strait relations remains crucial to Taiwan, as Fitch Ratings last week confirmed its A+ sovereign rating for Taiwan and its AA rating for the local currency, citing a positive outcome of the legislative elections with regard to maintaining the cross-strait status quo.
Another international rating agency, Standards and Poors, maintained its negative outlook on Taiwan, citing the nation's weakening fiscal flexibility and rising tensions with China.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure