DATE=3/20/2000
TYPE=CORRESPONDENT REPORT
TITLE=TAIWAN / ASIA MARKETS (L)
NUMBER=2-260361
BYLINE=AMY BICKERS
DATELINE=TOKYO
CONTENT=
VOICED AT:
INTRO: Uncertainty dominated Taipei's stock market
Monday, following the victory of opposition leader
Chen Shui-bian. But as we hear from Amy Bickers in
Tokyo, while Taiwan's market suffered a two-point-six
percent loss, other Asian markets were little affected
by the election results.
TEXT: Analysts had warned of a steep fall on Taipei's
blue chip index Monday, and while the market did
sink, the slide could have been worse.
The market suffered a two-point-six percent loss to
close at 85-36, with some shares spiraling as far as
possible. The government set a limit of a three-point-
five percent drop to discourage volatility.
Elsewhere in Asia, most stock markets closed lower but
the losses were small. Investors noted China's
moderate reaction to Taiwan's election results and
paid more attention to other factors, such as interest
rates and local corporate news. Hong Kong's market,
which was jittery during the past week, closed up
nearly one percent.
In Taiwan, market volatility is expected to persist.
Analysts say some investors fear increased tensions
with China, after Beijing warned Taiwanese voters not
to elect a candidate who supports independence - a
reference to Mr. Chen's pro-independence past. However
Mr. Chen softened that stand during the election
campaign and on Monday he sent out peace feelers to
Beijing. Some traders say concerns over Mr. Chen's
statements have already been figured into Taipei's
market, which dropped more than seven percent last
week.
Ralph Dickson, equity sales manager for Peregrine
Securities in Taipei, says the market may continue to
slip lower in the coming sessions, but over all, he
is optimistic -- especially because the government is
committed to protective market intervention.
/// DICKSON ACT ///
I think we are very close to the bottom here. I would
not expect more than another five to ten percent from
here. The stabilization fund has about 450 billion
Taiwan dollars worth of ability to buy before
government-controlled investment trusts and other
units with available cash balances friendly to the
equity and capital markets certainly will be there and
will be called on at the right time to come in and
lend a hand.
/// END ACT ///
Taiwan's government stepped in to the fray Monday and
purchased large quantities of stock to contain the
damage, just as it had in recent trading sessions.
It also intervened in the currency market to support
the Taiwan dollar. Brokers say the government moves
helped stabilize the market.
But officials from the Finance Ministry warned
investors the government cannot keep up the buying
spree.
Mr. Dickson believes that confidence in the country's
economy and strong export sector will eventually
prevail.
/// DICKSON ACT ///
The economic fundamentals actually, I think, will play
a great part in providing a good base with which Chen
Shui-bian can work. But obviously, the export-
oriented economy is something that's going to really
make a strong impact looking at the continuing
strength in the demand for the mainstream Taiwanese
products.
/// END ACT ///
Some of the stocks to fall hardest Monday were those
with manufacturing plants in mainland China. Among
them, computer company, Acer, which lost more than
three percent. In contrast, firms whose executives
had supported Mr. Chen rose strongly. (SIGNED)
NEB/AB/FC
20-Mar-2000 05:13 AM EDT (20-Mar-2000 1013 UTC)
NNNN
Source: Voice of America
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