The local equity and currency markets appear to have grown immune to extra capital and expectations of better ties with China after rallying for months amid poor economic fundamentals, analysts said recently.
The benchmark TAIEX gained 1,872 points, or 40.78 percent, this year while the New Taiwan dollar edged up NT$0.151, or 0.45 percent against the US currency, despite a record contraction of 10.24 percent in the first quarter, government statistics showed.
The stock index shed 426.88 points with turnover halving to NT$100 billion (US$3.03 billion) this month, after approaching the 7,000-point mark prior to the Dragon Boat Festival late last month on concern of overvalue.
Eric Lai (賴建承), an analyst at Marbo Securities Consultant Co (萬寶證券投顧), said that talks of recovery or warming ties with China could no longer galvanize the local bourse, which has entered a horizontal-correction phase in the absence of fresh stimulus.
“A leading indicator, the market operates on expectations,” Lai said on Thursday. “Few things, if any, come as a surprise these days.”
This phenomenon helped explain why the TAIEX rose 1.77 percent last Monday even as the Directorate-General of Budget, Accounting and Statistics said the unemployment rate hit a new high of 5.82 percent last month and is set to climb higher, Lai said.
Likewise, the stock barometer lifted a bare 0.09 percent the next day after the central bank decided last Thursday to keep the interest rates at their current low level.
“The development was consistent with the market expectation and so were revisions of GDP growth forecasts by domestic economic institutes,” Lai said.
Academia Sinica and Polaris Research Institute (寶華綜合經濟研究院) revised their estimate for the economy to a decline of 3.46 percent and 4.6 percent for this year respectively with an emphasis that the worst of the downturn is over.
Council for Economic Planning and Development Chairman Chen Tain-jy (陳添枝) said on Friday the economy was on a slow and protracted road to recovery, whatever shape it may take. Despite his share of uncertainty, Chen dismissed worry about a W-shape recovery — featured with double spells of slump — but admitted the recovery is too weak to resemble a V.
“However, all the data show the recovery is under way despite the snail’s pace,” Chen told local media after his agency released a report on the index of leading indicators, which picked up for the fourth straight month last month.
Johnny Chen (陳擎宏), deputy manager of the economics and industry research department at First Commercial Bank (第一銀行), said the recovery hinges on a revival of foreign demand in the second half of the year.
“Hopefully, the world economy is strong enough then to avoid a repeat of last year when the high season [for export orders] turned out to be shockingly cold,” he said.
The seizure of one of the largest known mercury shipments in history, moving from mines in Mexico to illegal Amazon gold mining zones, exposes the wide use of the toxic metal in the rainforest, according to authorities. Peru’s customs agency, SUNAT, found 4 tonnes of illegal mercury in Lima’s port district of Callao, according to a report by the non-profit Environmental Investigations Agency (EIA). “This SUNAT intervention has prevented this chemical from having a serious impact on people’s health and the environment, as can be seen in several areas of the country devastated by the illegal use of mercury and illicit activities,”
NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
DIVERSIFYING: Taiwanese investors are reassessing their preference for US dollar assets and moving toward Europe amid a global shift away from the greenback Taiwanese investors are reassessing their long-held preference for US-dollar assets, shifting their bets to Europe in the latest move by global investors away from the greenback. Taiwanese funds holding European assets have seen an influx of investments recently, pushing their combined value to NT$13.7 billion (US$461 million) as of the end of last month, the highest since 2019, according to data compiled by Bloomberg. Over the first half of this year, Taiwanese investors have also poured NT$14.1 billion into Europe-focused funds based overseas, bringing total assets up to NT$134.8 billion, according to data from the Securities Investment Trust and Consulting Association (SITCA),
Taiwan’s property transactions in the first half of this year fell 26.4 percent year-on-year to about 130,000 units, as credit controls and mortgage restrictions dampened demand, data from the Ministry of the Interior showed yesterday. Keelung saw the steepest decline, with transactions plummeting 45.6 percent to just 2,041 units — the lowest since the ministry began its survey in 2006. In contrast, Miaoli County was the only region to experience year-on-year growth, with transactions rising 2.4 percent to 3,229 units. Great Home Realty Co (大家房屋) attributed the increase in deals in Miaoli, particularly Jhunan (竹南) and Toufen (頭份) townships, to spillover demand
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