Wed, Jan 17, 2001 - Page 1 News List

TAIEX surges on grand justices' ruling

THE MARKET Investors bid up shares 5.3 percent yesterday on the hope that political bickering about the Fourth Nuclear Power Plant will come to an end


A Taiwanese stock investor smiles at a Taipei brokerage yesterday as the TAIEX rallied 5.3 percent, or 283.28 points to close at 5,662.94, after the Council of Grand Justices ruled that there were "flaws" in the Cabinet's move to halt the construction of the Fourth Nuclear Power Plant.


The stock market surged to a two-month high yesterday on the hope a court ruling will pave the way for an end to a six-month dispute between the government and opposition politicians.

But major business and industry leaders gave a low key response to the ruling some see as crucial to providing sufficient power for the nation's industries.

The TAIEX rose 283.28 yesterday, or 5.3 percent, to close at 5,662.94 points.

The Cabinet's decision in late October to cancel the Fourth Nuclear Power plant rattled foreign investors' confidence in Taiwan and sent the bourse down sharply on concerns that industries might face inadequate power supplies in the years to come.

Taiwan's biggest companies by market value rose yesterday on optimism the political dispute will abate following the court's decision on the fate of the power plant.

One market pundit said the end of the issue is near.

"Obviously the nuclear power plant will be built," said Cheng Yi-sheng, an analyst at Taiwan Securities Ltd. "The court has given the parties rules to follow and if the government and opposition follow the rules, the fight over the plant will be resolved."

Investors were encouraged by the ruling of the Council of Grand Justices on Monday that there were "flaws" in the Cabinet's move to scrap the building of the power plant, analysts said.

"There may be a happy ending on this nuclear dispute as the legislature is expected to decide on restarting the project while pledging that this will be the last nuclear project in Taiwan," said Peter Chang, head of Polaris Securities Advisory Co.

Meanwhile, Lin Kun-chung (林坤鐘), chairman of the Chinese National Federation of Industries (全國工業總會), said what companies are mostly concerned about is the steady supply of power -- regardless of its origin.

But another business leader said the issue was far from over.

Legislator Gary Wang (王令麟), who is also chairman of the ROC General Chamber of Commerce (全國商業總會), said that businesses want to see an end to the political uncertainties, thereby allowing them to make competent investment decisions.

According to Wang, now that the council's verdict is in, the ruling and opposition parties should take immediate action to diffuse the current political deadlock.

Any easing of the political wrangling is good for the market.

"For the time being a major uncertainty has been lifted from the market," said Austin Hung, a broker at Concord Securities.

Retail investors yesterday also reacted to aggressive net buying by foreign investors. "Even amid the relatively small market turnover on Monday when many were sidelined, foreigners continued to buy heavily. This is attracting retail investors back into the market," said Burt Lai, manager at First Securities.

Qualified foreign institutional investors (QFII) net bought NT$4.978 billion of stocks on the Taiwan Stock Exchange yesterday, according to data released by the exchange.

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