As the US-led war against Iraq enters its second week, uncertainty about the war's length is rattling investors in the nation's equity markets, economists said yesterday.
If the war is protracted, the nation's stock market and foreign currency market will be hard hit, Yang Ya-hwei (
Both markets have fluctuated along with the war's ups and downs carried on live TV news reports, she added.
"The Iraqi war may last longer than expected," Hsu Chen-min (
Hsu added that, with the US and UK facing strong Iraqi resistance, more financial experts have begun to express doubts about a quick war.
Yang reiterated her think tank's earlier estimates that the nation's economic growth rate this year may drop to 2 percent if the war goes past six weeks, and further slide to 0.3 percent if the war lasts longer than three months.
The combination of the war and rising concerns about the outbreak of severe acute respiratory syndrome (SARS) drove the TAIEX down 37.23 points yesterday, or 0.82 percent, closing at 4,477.01 on turnover of NT$32.56 billion.
Local investors are for the most part cautious.
"The war is so unpredictable that I don't dare put down more money on stocks today," a female investor in Taipei said yesterday, requesting not to be identified.
Uncertainties over the war also scared away a 66-year-old investor, who said that "the war may further drag the TAIEX down and I'm still waiting for it to bottom out."
The investor, surnamed Chen, said that concerns about the outbreak of SARS have been taken into consideration, but that the war may still pose a threat to the global economy.
But a 40-year-old individual investor surnamed Chen was upbeat about the TAIEX yesterday, saying the stock market is on an upward movement after having previously reacted to the war and the respiratory disease.
Aside from the war's duration, investors are worried about post-war reconstruction costs as well as possible retaliation from terrorist groups once the war has ended, said David Hong (
Hong urged investors to exercise caution, but added that potential oil price hikes are likely to hurt the economy in China, 60 percent of whose oil imports are from the Middle East.
"If China's economy performs poorly, so will Taiwan's," Hung said.
Rising oil prices will, moreover, increase costs for Taiwanese companies which export to the war zone.
Wu Chung-shu (吳中書), a research fellow at the Institute of Economics at Academia Sinica, said yesterday, however, that even if the US eventually claims victory, it will still be a lose-lose situation for both US President George W. Bush and Iraqi President Saddam Hussein.
The US may be overburdened with huge military expenses and post-war reconstruction costs, Wu said.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
Zimbabwe’s ban on raw lithium exports is forcing Chinese miners to rethink their strategy, speeding up plans to process the metal locally instead of shipping it to China’s vast rechargeable battery industry. The country is Africa’s largest lithium producer and has one of the world’s largest reserves, according to the US Geological Survey (USGS). Zimbabwe already banned the export of lithium ore in 2022 and last year announced it would halt exports of lithium concentrates from January next year. However, on Wednesday it imposed the ban with immediate effect, leaving unclear what the lithium mining sector would do in the
RSS