Tue, Mar 16, 2004 - Page 1 News List

TAIEX plunges following Chen Yu-hao's accusations

By Jessie Ho  /  STAFF REPORTER

President Chen Shui-bian and Vice President Annette Lu wave to supporters during a campaign visit to Taoyuan County yesterday.

PHOTO: CHIANG YING-YING, TAIPEI TIMES

The TAIEX took its biggest dive in almost a year yesterday, shedding 164.26 points, or 2.42 percent, to close at 6635.98, upset by pre-election awe, analysts said yesterday.

The TAIEX initially rose to 6,897.78 points, the highest point of the day, after the stock market opened, but stock prices started to plunge around noon, when former Tuntex Group chairman Chen Yu-hao (陳由豪) held a press conference in Los Angeles, California, denouncing President Chen Shui-bian's (陳水扁) administration.

The turnover yesterday was NT$170.18 billion, with decliners outranking risers 682 to 191, and 98 stocks unchanged.

"Obviously, political factors that were considered less critical to the market have started to ferment as the election edges closer," said Allen Tseng (曾炎裕), an associate manager of Capital Securities Corp.

Financial stocks, led by Cathay Financial Holding Corp, and stocks that lean toward the Democratic Progressive Party (DPP), such as Taiwan Salt Co (Taisalt) and Taiwan Fertilizer Co, saw abrupt drops after Chen Yu-hao's press conference started. Financial and insurance stocks dipped by 5.31 percent, while Taisalt and Taiwan Fertilizer fell by 7.5 percent and 7.3 percent, respectively.

Pan-blue shares such as China Television Co saw slight increases bolstered by the success of the opposition rally on Saturday, Tseng said.

Transportation shares showed the largest gains. China Airlines Co and EVA Airways Corp surged by 6.5 percent and 6.1 percent respectively on businesses gained from bringing Taiwanese businesspeople home to vote, Tseng added.

Peter Hsieh (謝杰良), manager of Polaris-Protime Securities Consultant, however, disregarded the effect of Chen Yu-hao's accusations, saying the steep decline resulted from a recent accumulation of adverse incidents that shattered investors' confidence, including the terrorist attack in Spain last week and the lukewarm performance of the US stock market.

Foreign investors sold nearly NT$8.5 billion worth of stocks yesterday, while local investors shed more than NT$6.8 billion.

"I think the aftershock of the press conference will continue to beat down the market, which means the TAIEX should wander around 6,600 points before the election," Hsieh said.

The low tide on the eve of the election offers investors a great opportunity to buy, as shares will definitely go up after weathering the political uncertainty, Tseng said.

Hsieh agreed, adding that it is a question of what shares to buy, rather than whether to buy or not.

Although finance stocks suffered due to the political sentiment, they should rebound after the election, Hsieh said.

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