Minister of Finance Su Jain-rong (蘇建榮) yesterday urged investors to remain calm, calling declines in the local bourse on Monday and yesterday a common period of consolidation following last month’s recurrent rallies to record highs on the back of an economic boom.
The TAIEX yesterday shed 288.57 points, or 1.68 percent, to 16,933.78 on an unprecedented turnover of NT$664.2 billion (US$23.762 billion) amid panic selling by day traders, analysts said.
The retreat came after a plunge of 344.31 points on Monday, taking cues from weaker activity on the Philadelphia Semiconductor Index and the NASDAQ Composite in the US, as well as additional locally transmitted COVID-19 infections.
Photo: CNA
However, yesterday’s selloff focused on non-tech stocks after the tech sector had been battered in the previous day’s session.
In the shipping sector, which dropped 8.48 percent, Evergreen Marine Corp (長榮海運) fell 10 percent to close at NT$78, Yang Ming Marine Transport Corp (陽明海運) fell 8.78 percent to close at NT$80 and Wan Hai Lines Ltd (萬海航運) declined 10 percent to close at NT$91.4.
The steel industry was also a target of the latest selloff, down 6.65 percent, with China Steel Corp (中鋼) down 5.97 percent to close at NT$36.25, Tung Ho Steel Enterprise Corp (東和鋼鐵) down 7.96 percent to close at NT$53.50 and Yieh Hsing Enterprise Co (燁興企業) down 10 percent to close at NT$14.50.
Su said that the corrections were technical consolidation often seen when share prices make record advances.
Investor skepticism had earlier mounted when the local bourse rallied toward 18,000 points on large daily turnover of about NT$500 billion.
Su hesitated to elaborate on TAIEX showings, but said that the recent weeks of rallies likely reflect the nation’s healthy economic fundamentals.
Exports, which account for 60 percent of GDP, remained in positive territory last month after putting up a stronger-than-expected performance last quarter, prompting upward revisions for the nation’s annual GDP growth this year, Su said.
The ministry is to disclose foreign trade data for last month on Friday.
Su said that he would discuss with the Financial Supervisory Commission whether it is wise to extend favorable tax rates to day traders.
Critics have said that day trading accounts for more than 30 percent of daily turnover and underpins drastic volatility, encouraged by favorable tax terms.
Hsieh Chin-ho (謝金河), chairman of the Chinese-language Wealth Magazine, has asked policymakers to consider withdrawing the day trading tax cuts, saying that continued favorable tax terms would make the government like casino operators who seek to inflate the state chest by turning the local bourse into a casino.
Contrary to popular opinion, foreign institutional players were not to blame for the slump as they increased holdings in local shares by net NT$88.85 million yesterday, Taiwan Stock Exchange data showed.
Mutual funds trimmed positions by net NT$2.28 billion, while proprietary traders cut another net NT$1.39 billion, exchange data showed.
Appreciation of the New Taiwan dollar to NT$27.952 against the US dollar in Taipei trading yesterday, from NT$27.979 on Monday, lent support to the selloff driven by day trading, analysts said.
Edward Chen (陳奕光), chairman at state-run First Capital Management Inc (第一金投顧), said that the corrections helped to reduce bubble pressure in the local bourse, which last month saw an increase in margin trading, which can lead to instability.
As long as the NT dollar holds steady and foreign players stay on board, the TAIEX would soon recover its growth momentum, Chen added.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day