US President George W. Bush’s plan to rescue the US financial industry will impact on the local bourse this week, with the TAIEX expected to rally if the bill clears the US Congress and restores investor confidence in Wall Street, analysts said yesterday.
The local stock market was closed yesterday because of Typhoon Jangmi.
Shen Chung-hua (沈中華), a finance professor at National Taiwan University, said he believed the US Congress would give a green light to the US$700 billion rescue package intended to ease a growing credit crisis, and the development would have a positive impact on financial markets in Taiwan.
He said the TAIEX was likely to shoot up today after the Bush administration and Congress reached an agreement on the package on Sunday morning. The benchmark index shed 131.2 points, or 2.16 percent on Friday amid concerns the bill had hit a snag as lawmakers from both aisles voiced objections.
The measure, if adopted, could provide relief for cash-strapped banking institutions and calm investors, who have been unsettled by reports of bank failures, Shen said.
The bailout plan still faces stiff resistance from Republican and Democratic lawmakers though the House and Senate were scheduled to vote on the bailout plan yesterday and today respectively.
Yu Jui-ming (余睿明), a manager at Yuanta Investment Trust Co (元大投信), said the bill’s advancement would be interpreted as favorable by local investors in the short term.
Yu said that the stock markets in the US and Taiwan have gained momentum every time the US Federal Reserve or the Department of Commerce adopted a financial stabilization measure in the past, although the rallies did not last long.
In the long run, Yu said the measure would increase the US budget deficit, weaken the greenback and push up inflation.
Investors may again turn to crude oil and other products to hedge profit losses, thereby driving up fuel costs, Yu said.
Dexter Hsu (許世德), an analyst with JP Morgan, echoed the cautious sentiment, saying the bailout plan promised no remedy to the US economic slowdown, which has hurt Taiwan’s exports and financial industry.
Hsu said it would take one to two years for the international credit crisis to heal and the TAIEX would remain volatile before the recovery.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
RSS