Thu, Jan 08, 2009 - Page 11 News List

Global market losses hit US$17tn, S&P report says

TAKING THE PLUNGE Last year’s net sale of NT$470.3 billion in local shares on the Taiwan Stock Exchange by foreign investors marked their largest net sale in history

By Kevin Chen  /  STAFF REPORTER

Standard & Poor’s (S&P) said 46 global equity markets that comprise the index provider’s Global Broad Market Indices closed out last year with a combined loss of US$17 trillion in market value in the wake of a 54.7 percent share plunge in emerging markets and a 42.72 percent fall in developed markets.

But there appears to be some light at the end of the tunnel following a rebound in global equity markets last month, with 19 of the 21 emerging markets and 22 of the 25 developed markets posting gains during the month, S&P said in its monthly global stock market review yesterday.

“A glimmer of hope — that is how we can define December,” Howard Silverblatt, a senior index analyst at S&P and author of the report, wrote in a statement.

The report showed that Morocco was the best performer among emerging markets with an annual decline of 15.9 percent last year, while Japan posted the best performance among developed markets with a drop of 29.2 percent during the year.

The BRIC countries — previously the jewels of global equity markets — saw notable plunges last year, including declines of 57.4 percent in Brazil, 73.7 percent in Russia, 64.5 percent in India and 53.2 percent in China, S&P tallies showed.

“As central banks race to reduce rates, add liquidity and shore up their local economy, markets remain cautiously optimistic as we move into 2009,” Silverblatt wrote.

“However, as evident by the huge stock piles of cash still on the sidelines, many world markets are taking a wait-and-see approach. The result is a continuance of extreme market volatility,” he said.

In Taiwan, because of heavy selling by foreign investors last year, the benchmark TAIEX fell 46 percent to end at 4,591.22 points on Dec. 31, while the over-the-counter index slid 58.3 percent to close at 64.37 points, the two stock exchanges’ tallies showed.

Foreign investors sold a net NT$470.3 billion (US$14.23 billion) in local stocks on the Taiwan Stock Exchange (TWSE) last year, the Financial Supervisory Commission said in a statement on Tuesday.

That came from a total purchase of NT$6.23 trillion in local shares and a total sale of 6.7 billion in stocks by foreign investors on the main bourse, the commission said.

On the GRETAI Securities Market, foreign investors sold a net NT$25 billion in stocks last year, the commission said, with total purchases reaching NT$137.6 billion and total sales hitting NT$162.6 billion on this over-the-counter market.

Last year’s net sale of NT$470.3 billion in local shares on the main bourse by foreign investors marked their largest net sale in the main exchange’s history and was compared with their net purchase of NT$74.13 billion in 2007, TWSE said in a statement on Dec. 31.

The total market value of Taiwanese stocks shrank 45.6 percent to NT$11.7 trillion at the end of last year, from NT$21.5 trillion a year earlier, the stock exchange said.

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