Greece debt af­fects lo­cal mar­ket: an­a­lysts

The China Post - - BUSINESS - BY JOHN LIU

Greece’s un­re­solved debt cri­sis has wide ram­i­fi­ca­tions on stock mar­kets around the globe, and as a con­se­quence, Tai­wan’s stock mar­ket will ex­pe­ri­ence down­ward ad­just­ment for some time, pre­dicted for­eign an­a­lysts.

Greece was sup­posed to re­pay its first loan in­stall­ment of the month — 300 mil­lion eu­ros — on June 5. With ris­ing risk of de­fault, stock mar­kets saw large swings in the past week, and in Tai­wan, af­ter 5-day mov­ing av­er­age plum­meted 360.94 points, the stock mar­ket closed at 9,340.13 on Fri­day.

While the debt cri­sis has been par­tially re­lieved af­ter Greece pledged to re­pay all four loan in­stall­ments for June (1.6 bil­lion eu­ros in to­tal) bor­rowed from the In­ter­na­tional Mon­e­tary Fund at the end of the month, in­vestors are still some­what re­served on the coun­try’s abil­ity to stay afloat.

The un­cer­tainty casts a shadow on short-term stock mar­ket per­for­mance around the world, ac­cord­ing to a U.S.-based in­vest­ment in­sti­tu­tion.

An an­a­lyst from a Europe­based in­sti­tu­tional in­vestor said Greece’s debt prob­lems have ad­verse im­pacts around the world, and that if stock mar­kets in the U.S. con­tinue to sag, Tai­wan’s stock mar­ket may un­der­per­form.

Nev­er­the­less, some for­eign se­cu­ri­ties deal­ers re­main up­beat about the per­for­mance in the lat­ter half of the year. With grow­ing prof­itabil­ity for Tai­wanese com­pa­nies, the ap­proach of peak sea­son for elec­tron­ics com­pa­nies, and the launch of quan­ti­ta­tive eas­ing in Europe, which in­fuses mar­kets with money, deal­ers ex­pect the Tai­wan stock in­dex will re­claim the 10,000-point mark down the road.

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