Stock market regulators and local businesses should exercise extreme caution amid volatilities in global markets and economies, as Taiwan’s economy and stock market can easily be affected by events occurring abroad due to its small scale. On top of that, noneconomic factors such as escalating geopolitical tensions, wars in the Middle East and Russia’s invasion of Ukraine could quickly pose major threats to Taiwan’s stock market. Regulators should draw a clear baseline and prepare countermeasures to face such situations, while local businesses should be on alert for fast-changing external factors.
The TAIEX on Monday was hit hard by a US stock market rout, along with most Asian markets. The index nosedived to close below 20,000 points for the first time since April 25, as fears of a faltering US economy and a potential artificial intelligence (AI) bubble burst triggered selloffs. Technology stocks bore the brunt of the chaos. The TAIEX fell 8.35 percent, or 1,807.21 points, the steepest drop in its history, to close at 19,830.88 points, after US markets sank on Friday.
The Dow Jones Industrial Average on Friday fell 1.51 percent, while the S&P 500 dropped 1.84 percent, as a worse-than-expected contraction in manufacturing activity last month and cooled job data raised concerns that the US economy might dip into recession. The US only added 114,000 new nonfarm jobs last month, down sharply from 179,000 the previous month.
Additionally, shares of AI chip supplier Nvidia Corp on Friday fell 1.8 percent after the technology-focused news Web site The Information reported that the company would delay shipments of its next-generation Blackwell B200 AI chips by about three months due to design flaws, slamming the brakes on the burgeoning AI industry.
That precipitated dramatic ripple effects that shook the stock prices of Nvidia’s local partners, including Taiwan Semiconductor Manufacturing Co (TSMC), its sole chip supplier, and AI server assemblers Quanta Computer Inc and Wiwynn Corp. TSMC stock on Monday plunged 9.75 percent to NT$815, while Quanta and Wiwynn shares fell 9.96 percent and 9.82 percent to NT$239.5 and NT$1,790 respectively.
“People should be well prepared as [stock routs] are part of the world economic cycle,” Minister of Economic Affairs J.W. Kuo (郭智輝) said. He did not elaborate on what investors should do to prepare for volatilities in world markets.
The Taiwan Stock Exchange on Monday held an emergency news conference in an attempt to boost investor confidence. Local companies have built healthy fundamentals, with all listed companies registering 10 percent annual revenue growth in the first half of this year, the stock exchange said. It did not unveil any countermeasures, such as tightening the permitted range of stock movements, to prop up the market. It only said it is closely monitoring the effects of shifts in global stock markets on the TAIEX, as the selloffs were not triggered by non-economic factors.
Regulators, including the Taiwan Stock Exchange and the Financial Supervisory Commission, should be on high alert to external risks, given heightened geopolitical tensions, uncertainty about the US presidential elections and the US Federal Reserve’s stance on key interest rates, and the complexity of global financial situations. As those factors cannot be controlled, well-planned countermeasures and a clear baseline are needed to avert a crisis.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
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