The Financial Supervisory Commission (FSC) yesterday said Standard & Poor’s credit-rating downgrade of nine European nations on Friday would have “no direct influence” on Taiwan’s financial industry and would have “a limited impact” on the global economy.
“Taiwan’s stock market fundamentals remain sound, there is no need for the public to worry too much,” the commission said in a statement posted on its Web site.
The nation’s stock market is expected to stage a rally today because President Ma Ying-jeou’s (馬英九) re-election on Saturday has removed political uncertainty, although the gains might be capped by the European debt crisis and the S&P’s latest move.
The commission said the S&P downgrade was aimed at addressing concerns that the actions of European policymakers in recent weeks were insufficient to relieve the ongoing systemic stresses.
However, the top 10 sovereign bond holdings held by Taiwanese banks do not include France and Austria, the two nations that saw their “AAA” rating stripped by S&P, the commission said.
In addition, Taiwan’s stock market has a relatively high dividend yield compared with Hong Kong, Singapore, Japan, the US and the UK, the commission said.
The nation’s listed companies reported an average dividend yield of 5.65 percent last month, while their average price-to-earnings ratio of 15.29 times and price-to-book ratio of 1.48 times as of the end of November were also good targets for investors, it said.