Investors will pay close attention to president-elect Ma Ying-jeou’s (馬英九) inauguration speech on Tuesday to learn what policies the incoming Cabinet will bring up in its first weekly meeting.
Even before the new president and the Cabinet are sworn in, investors appeared optimistic about the prospect of profiting from local equity investment, helping to send share prices to their highest closing level of 9,197.41 points this year on Friday.
After 10 weeks of withdrawal from Taiwan’s market, foreign institutional investors rekindled their passion for local shares last week. The latest stock exchange data showed that foreign investors have bought a net NT$30.4 billion (US$992 million) in local stocks so far this month, after they had sold a net NT$47.7 billion in the previous two months.
The latest data from domestic investment trust companies may have also helped assure a positive sentiment in the market, with local fund managers having a total of NT$2.15 trillion worth of funds under their control at the end of last month. This figure was up NT$105.96 billion, or 5.19 percent, from NT$2.04 trillion at the end of March, thanks to the addition of 26,600 investors, or an increase of 1.43 percent over the same period.
But investor optimism contrasted with public concern fueled by stagnant wages, rising food and fuel prices and academics warning of a bubble in the local housing market in light of the expected inflow of Chinese capital. How the new administration will address these problems will determine whether the bullish momentum will continue.
Investors should not unrealistically expect Ma’s administration to aggressively deliver on all his campaign promises.
Because it won’t: The pace of cross-strait liberalization will be slow because most Taiwanese prefer a gradual opening rather than a hasty relaxation. Ma’s selection of former Taiwan Solidarity Union lawmaker Lai Shin-yuan (賴幸媛) as Mainland Affairs Council (MAC) chairwoman makes one wonder if her appointment was to provide the relaxation policy with a reality check.
The market will also have its eye on plans for more cross-strait charter flights and an increased number of Chinese tourists. But because of possible prolonged negotiations and red tape, the incoming transportation and communications minister Mao Chi-kuo (毛治國) suggested last week that neither the weekend charter flights nor the Chinese tourist influx was likely to happen as soon as expected.
As for the lifting of the 40-percent China-bound investment cap, businesspeople should be disappointed at what designated minister of economic affairs Yiin Chii-ming (尹啟銘) said recently. During an interview, Yiin only promised to prioritize the removal of the investment cap and stressed that the final decision would be up to the MAC.
Investors should also pay attention to economic data set to be released this week, including the current account balance and real GDP for the first quarter, as well as industrial production and export orders last month.
With rising food and energy import costs, signs of weakening export growth to other Asian countries and a persistently slowing global economy, investors should be aware of the nation’s decelerating GDP growth momentum in the months ahead. Among other things, the central bank’s quarterly meeting next month and its evaluation of the economy will be key factors to watch.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
RSS