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To: brian h who wrote (47603)	3/21/2004 2:56:02 PM
From: stan_hughes	Read Replies (1) \| Respond to of 74559

Taiwan market braced for fall-out From correspondents in Taipei 21mar04 (NB - the bolding within the text below is mine) TAIWAN was bracing for a turbulent ride when markets reopened Monday after weekend presidential elections were overshadowed by violent protests, opposition demands for a recount and lingering uncertainty. Finance Minister Lin Chuan told reporters the government would intervene only "under certain circumstances such as irrational selling stocks" after the political crisis caused by President Chen Shui-bian's narrow election victory. The government said the central bank will also only step in to maintain a stable exchange rated if there are any "irrational fluctuations" in the money market. Premier Yu Shyi-kun joined a chorus of investors and economists in saying he was concerned about the financial and economic impact of the crisis in the wake of Saturday's vote. It will also be the first time the markets have the opportunity to respond to the attempted assassination of Chen, with the news of the shooting breaking only after they closed on Friday. Yu, a member of Chen's Democratic Progressive Party (DPP), said demands by the opposition Kuomintang (KMT) for the results of the election to be declared void and for a recount to be held were a major cause for concern. He said the violent protests that erupted across the island after the opposition party's calls only added to the worry. The Kuomintang claimed spoiled ballot papers and an apparent assassination attempt on Chen on Friday, a day before the election, swung the vote in the president's favour, handing him victory by just 30,000 votes. Uncertainty about the election "will affect foreign investors from coming to Taiwan," Premier Yu told journalists. Investment adviser Wang Chao-li from Polaris-Protime Securities said the political crisis would seriously tarnish business confidence on the island. "Investment interest from foreign and domestic businesses will definitely suffer from the political uncertainty that Taiwan is facing right now," Wang said. "The election results came as a complete surprise and many institutional investors are still at loss for what to do," said Wang. The bitter dispute over the legitimacy of Chen's victory, which was likely to drag on, would also discourage domestic consumption in the short- and medium-term, he said. The public's sense of insecurity could further strain Taiwan's relations with China and undermine the island's economic outlook, he said. But economics professor Chang Ching-hsi from National Taiwan University downplayed fears of the economy suffering in the medium to long term: "The incident will no doubt depress investment interest but only in the short-term." Analysts said they believed the stock market would bear the brunt of the political problems, with prices on the Taipei share index expected to tumble when the market opens on Monday. Grand Cathay Investment Service Corp. vice president Sean Liu said the election results had caught everyone off guard and the stock market's short-term direction would be bearish. He said that investors had bet before the polls on opposition Kuomintang leader Lien Chan winning the presidency, an expectation that had fueled strong buying of China-related stocks. "What scares investors the most is not bad news, but uncertainty," said Liu. © The North Queensland Newspaper Company Limited townsvillebulletin.news.com.au