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.
Chinese Nationalist Party (KMT) caucus whip Fu Kun-chi (傅?萁) has caused havoc with his attempts to overturn the democratic and constitutional order in the legislature. If we look at this devolution from the context of a transition to democracy from authoritarianism in a culturally Chinese sense — that of zhonghua (中華) — then we are playing witness to a servile spirit from a millennia-old form of totalitarianism that is intent on damaging the nation’s hard-won democracy. This servile spirit is ingrained in Chinese culture. About a century ago, Chinese satirist and author Lu Xun (魯迅) saw through the servile nature of
In their New York Times bestseller How Democracies Die, Harvard political scientists Steven Levitsky and Daniel Ziblatt said that democracies today “may die at the hands not of generals but of elected leaders. Many government efforts to subvert democracy are ‘legal,’ in the sense that they are approved by the legislature or accepted by the courts. They may even be portrayed as efforts to improve democracy — making the judiciary more efficient, combating corruption, or cleaning up the electoral process.” Moreover, the two authors observe that those who denounce such legal threats to democracy are often “dismissed as exaggerating or
Monday was the 37th anniversary of former president Chiang Ching-kuo’s (蔣經國) death. Chiang — a son of former president Chiang Kai-shek (蔣介石), who had implemented party-state rule and martial law in Taiwan — has a complicated legacy. Whether one looks at his time in power in a positive or negative light depends very much on who they are, and what their relationship with the Chinese Nationalist Party (KMT) is. Although toward the end of his life Chiang Ching-kuo lifted martial law and steered Taiwan onto the path of democratization, these changes were forced upon him by internal and external pressures,
The Chinese Nationalist Party (KMT) caucus in the Legislative Yuan has made an internal decision to freeze NT$1.8 billion (US$54.7 million) of the indigenous submarine project’s NT$2 billion budget. This means that up to 90 percent of the budget cannot be utilized. It would only be accessible if the legislature agrees to lift the freeze sometime in the future. However, for Taiwan to construct its own submarines, it must rely on foreign support for several key pieces of equipment and technology. These foreign supporters would also be forced to endure significant pressure, infiltration and influence from Beijing. In other words,
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