Eeks, papa, not that way either ...
QUOTE
Further falls feared as plunge wipes out investor confidence
Monday, July 16, 2001
TAIPEI
markets.scmp.com
AGENCIES
--------------------------------------------------------------------------------
Stocks are likely to suffer more losses in Taiwan this week in the face of a collapse of confidence after the market plunged to a eight-year low on Friday.
The Weighted Index last week lost 221.33 points, or 4.7 per cent, to 4,485.68, the lowest since December 1993.
"Investors' confidence is near the brink of collapse with the market moving in a downward spiral in spite of Wall Street's rebound recently," a securities firm analyst said.
"Now that Taiwan's market has derailed from its links to Wall Street, there seems to nothing that can reverse the downturn."
A prolonged global slowdown has severely weakened Taiwan's economy, which saw its growth plummet to a 26-year low of 1.06 per cent year on year in the first quarter.
The island's highest research body the Academia Sinica on Friday cut its projection for economic growth this year to 2.38 per cent from an earlier 5.21 per cent, sharply lower than the government's forecast of 4.02 per cent.
If realised it would mark the weakest growth in Taiwan's gross domestic product since 1.16 per cent in 1974.
The analyst warned that further weakness of Taiwan shares could force foreign institutions to dump big parts of their holdings to avoid losses, pushing the market into a free-fall.
"The government is likely to step in and try to prevent the market from falling further, but it's hard to predict how effective its effort will be," he added.
Stocks saw heavy losses on Friday as jittery investors cashed out after the economic growth projection was cut.
Beyond Asset Management managing director and portfolio manager Michael On said: "It was a big surprise that the [Weighted Index] fell so much because many have already forecast Taiwan's GDP growth will be lower than 3 per cent or even 2 per cent this year. This shows investors' confidence is really weak."
UNQUOTE |
