The local bourse yesterday turned a cold shoulder to measures to bolster trading, with the TAIEX tumbling below the 9,000-point mark to 8,955.18 on light turnover, taking cues from Wall Street overnight, analysts said.
Foreign institutional players cut a net total of NT$4.56 billion (US$149.8 million) in local shares, contributing to the main index’s 0.95 percent fall and sluggish trading of NT$69.38 billion, Taiwan Stock Exchange data showed.
Upcoming measures are aimed at lowering funding thresholds for stock investments via securities borrowing and margin trading, state-run Hua Nan Securities Management Investment Co (華南投顧) chairman David Chu (儲祥生) said by telephone.
“While positively intended, they have little effect on the market, which shows more concerns over the entire exit of quantitative easing [QE] by the US Federal Reserve later this month,” Chu said.
Expectations of the QE exit and ensuing interest rate hikes have driven global funds to rally behind the US dollar and pull out of emerging markets, including Taiwan, Chu said.
Investors across the world are watching moves by the Fed and other central banks and would rather stay on the sidelines while uncertainty pans out, Chu said.
Central banks in the EU and Japan are also due to meet later this month.
On Tuesday, the Financial Supervisory Commission (FSC) said it would relax credit restrictions on margin trading and short-selling on both the Taiwan Stock Exchange and GRETAI Securities Market, including lifting the cap on borrowing for margin trading or short-selling of a single stock on the main bourse to NT$30 million from the current NT$15 million and NT$10 million respectively.
The new rules are to take effect on Nov. 10.
Commission Chairman William Tseng (曾銘宗) acknowledged that he could not reverse the strategy of foreign investors, who play a key role in dominating local market directions and have turned conservative toward local shares.
As of Friday last week, net foreign funds stood at US$191.04 billion, compared with US$560 million at the end of last month, the commission’s data found.
A strengthening greenback is unfavorable for emerging market stocks that may see more volatility and corrections ahead if the US dollar continues to gain value, Tai Hui (許長泰), a Hong Kong-based chief market strategist at JPMorgan Asset Management, said at a media briefing in Taipei yesterday.
Hui said the Fed might not raise interest rates until June next year, even though US inflationary pressures have picked up faster than expected in recent months.
Europe and Japan, on the other hand, face growing downside risks of slipping back into recession, Hui said.
Japan’s central bank would extend current monetary easing or introduce more drastic stimulus measures at the end of this month to prevent the scenario, he said.
Taiwan has benefited from stable economic recovery in the US, thanks to its close links with the world’s largest economy, Hui said, adding that stock investments yield better returns amid a tightening monetary cycle if investors take care of risk controls.
However, the weakening value of the New Taiwan dollar has also played a role in luring investors to move funds outside Taiwan lately, analysts said.
The NT dollar fell NT$0.052 to close at the day’s low of NT$30.505 against the US dollar in Taipei trading yesterday.
Citing significant depreciation of the South Korean won against the US dollar recently, the central bank yesterday said it would keep a close eye on NT dollar movements compared with other major currencies.
A sharp decline in the won poses a disadvantage to Taiwanese exporters, because a relatively high NT dollar value undercuts the nation’s export competitiveness.
However, Lin Sun-yuan (林孫源), director-general of the central bank’s department of foreign exchange, said market demand and supply is still the major factor affecting the NT dollar’s rate, adding that it is usually less volatile than other major currencies.
Additional reporting by Amy Su
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last