Asia: Taiwan shares lag, again
Asia: Taiwan shares lag, again
Taiwan’s stocks failed to sustain gains this month as the government distanced itself from China.
The performance suggests the market could trail the Asia-Pacific region for a fifth consecutive year.
President Chen Shui-bian of Taiwan, halfway through his second four-year term, started the year by emphasizing the need for a bigger arms budget and a new constitution. His stance prompted Frank Hsieh, an advocate of direct transport links and closer ties with China, to resign as prime minister two weeks ago.
China, which regards Taiwan as a renegade province, is the island’s largest market for exports and investment. After Hsieh stepped down, Taiwan Semiconductor Manufacturing and China Airlines led a decline in the Taiex index. A rebound last week left the index down 0.2 percent for January.
“The Taiwan market will probably be in for a lackluster year,” said Jerry Chen, head of fund management at First Global Investment Trust. “A fall-off in relations with a key economic partner isn’t a plus for Taiwan.”
Disappointing earnings from Intel, the world’s largest computer-chip maker, and a rally in oil prices contributed to the slump in Taiwan and hurt markets elsewhere in the region.
The Morgan Stanley Capital International Asia-Pacific index, lifted by a rally after the Lunar New Year holiday began, climbed 2.7 percent. Trading in Taiwan will resume on Friday.
“Taiwan is off to a terrible start this year,” said Albert King, chief investment officer at Prophet Capital in Taipei.
Taiwan Semiconductor, the world’s largest supplier of made-to-order computer chips, is awaiting permission to relocate some production to China. Its shares retreated as much as 3.6 percent after Hsieh resigned.
Shares of China Airlines have lost 7.8 percent. Chen’s government bars regular direct cross-Strait transportation links.
Advanced Semiconductor Engineering, the world’s largest packager of chips, has dropped 6.8 percent this year. The company is also seeking approval to shift production to China.
TAIPEI: Taiwan’s stocks failed to sustain gains this month as the government distanced itself from China.
The performance suggests the market could trail the Asia-Pacific region for a fifth consecutive year.
President Chen Shui-bian of Taiwan, halfway through his second four-year term, started the year by emphasizing the need for a bigger arms budget and a new constitution. His stance prompted Frank Hsieh, an advocate of direct transport links and closer ties with China, to resign as prime minister two weeks ago.
More: iht.com