But bank problems will not affect operations at the island's biggest and best known companies, chip foundries Taiwan Semiconductor Manufacutring Co. (TSM: news, msgs) and United Microelectronics Corp. (UMC: news, msgs) , as they can raise funds from overseas capital markets and have little exposure to domestic banks, say analysts.
www2.marketwatch.com
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WRAP: Taiwan Stks Plunge 4.9%; Govt Says Fall Irrational
By J.R. Wu
Of DOW JONES NEWSWIRES
TAIPEI (Dow Jones)--Fears about a possible homegrown financial crisis sent Taiwanese shares tumbling almost 5% Thursday, even as the government rushed to correct what it sees as investors' mistaken perceptions about the island's banking sector, economy and financial markets.
No banking crisis is brewing and public confidence has been clouded by irrationality, government officials say.
However, investors aren't listening: the Taiwan Weighted Index fell 282.89 points, or 4.9%, Thursday to close at 5454.13. Over the past five sessions, Taiwan's bellwether index has lost 10%. And more falls are predicted.
"Continued concerns about the banking sector have caused investors to become more pessimistic," said Michael McGregor, vice president of international sales at Primasia Securities in Taipei.
Bearish dealers say the stock market is headed down towards 5300, while the extremists predict a fall to 5000.
Analysts say the island's retail investors, who account for over 90% of daily turnover and are notorious for their volatile day-trading habits, are in part to blame for the sharp gyrations afflicting the main index. |
