Daily fluc­tu­a­tion cap in­crease at­tracts lit­tle ac­tion on 1st day

The China Post - - FRONT PAGE -

The in­crease in daily fluc­tu­a­tion limit for shares in Tai­wan failed to at­tract in­vestors on its in­cep­tion yes­ter­day as the lo­cal mar­ket fell in range and vol­ume fol­low­ing drops on Wall Street and ma­jor Euro­pean mar­kets.

Start­ing yes­ter­day, the prices of shares listed in Tai­wan’s eq­uity mar­ket are al­lowed to rise or fall by as much as 10 per­cent in a day — up from 7 per­cent — but the weighted in­dex on the Tai­wan Stock Ex­change closed down 75.38 at 9,625.69. The vol­ume of shares traded yes­ter­day was also lower than ex­pected, with turnover to­tal­ing NT$91.24 bil­lion.

In com­par­i­son, the weighted in­dex closed at 9701.07 on Fri­day with an un­usu­ally high daily turnover of NT$140.391 bil­lion.

The lo­cal mar­ket per­formed timidly de­spite the in­creased room for fluc­tu­a­tion be­cause in­vestors were more con­cerned by the weak global stock mar­kets, said Vice Min­is­ter of Fi­nance Wu Tang-chieh ( ).

Wu pointed out that the change from the 7 per­cent set 25 years ago was in line with global stock mar­kets. He said that it will take time for the limit in­crease to show its ef­fect, but he is con­fi­dent that the new pol­icy will be ben­e­fi­cial to Tai­wan’s eq­uity mar­ket in the long run.

Deal­ers quoted by the Cen­tral News Agency pointed out that neg­a­tive news — such as the down­ward re­vi­sion of the U.S first-quar­ter GDP data re­newed wor­ries over the global eco­nomic fun­da­men­tals, in­clud­ing the loom­ing fear of a “Grexit” — have sim­ply gen­er­ated too much grav­i­ta­tional pull for lo­cal stock prices de­spite the new pol­icy.

Over a dozen stocks saw their prices surge to the new daily limit yes­ter­day, with tex­tile man­u­fac­tur­ers re­port­ing the best per­for­mances, in­clud­ing Hong Yi Fiber ( ) closing at its daily price limit of NT$37.75, Tex-Ray ( ) at NT$14.5 and Li- Cheng En­ter­prise ( ) at NT$161.5.

Bell­wether elec­tron­ics stocks closed down 1.01 per­cent yes­ter­day amid con­cerns over Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co.’s (TSMC, ) sales growth in the third quar­ter. The com­pany, the most heav­ily weighted stock on the Tai­wan Stock Ex­change, dropped 0.68 per­cent to close at NT$145.00.

“The lo­cal bourse re­mained haunted by neg­a­tive leads from over­seas. Judg­ing from the mod­er­ate turnover to­day, in­vestors were not prompted by the big­ger fluc­tu­a­tion lim­its to sell more shares dur­ing the ses­sion,” Marbo Se­cu­ri­ties In­vest­ment Con­sult­ing an­a­lyst Chang Chi­hcheng was quoted by the CNA as say­ing.

CNA

Two men hold their heads while look­ing at the stock prices board at a stock bro­ker­age in Taipei, yes­ter­day.

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