Weak growth, sales caused stock plunge: FSC
The Financial Supervisory Commission ( FSC, ) attributed a stock plunge yesterday to disappointing second-quarter growth and the downward revised sales targets of bellwether firms, notably MediaTek Inc. (
). Heavy selling pushed the TAIEX to its lowest point in 17 months yesterday. The weighted index on the Taiwan Stock Exchange closed down 140.93 points, or 1.62 percent, to end at 8,524.41 on turnover of NT$78.2 billion.
FSC Chairman Tseng Mingchung ( ) told local media that the fall was primarily due to disappointing economic data released the preceding trading day.
On Friday, the Directorate General of Budget, Accounting and Statistics ( ) announced that Taiwan’s gross domestic product (GDP) gained only 0.64 percent in the second quarter of 2015, missing its forecast of 3.05 percent.
Tseng said that the secondquarter data shook investor confidence and absolutely will influence the operations of Taiwan’s publicly traded companies in the coming months.
The extent of its impact cannot be confirmed until firms file their July revenue data and semiannual reports, Tseng said.
The FSC chief said investor confidence in the high-tech sector also took a hit after leading manufacturers, including Hermes Microvision Inc. ( ) and MediaTek, revised their second-half sales targets downward.
MediaTek yesterday reported less-than-expected profit for the second quarter and said it had cut its handset-IC shipment target by 10 percent, from 450 million to 400 million in 2015. Meanwhile, Hermes Microvision lowered its revenue growth forecast from 25 to 35 percent to 5 to 20 percent.
NDC Eyes Private Investors
Also yesterday, an official at the National Development Council (NDC, ) said that it will be “very difficult” for Taiwan to meet its construction target for 2015.
Wu Ming-huei ( ), economic development director at the NDC, said Taiwan’s poor secondquarter performance means that it would be a challenge to meet its construction target in 2015.
There is no short-term cure for weak exports, but the central government will continue efforts to stimulate the economy and to encourage private investment, Wu said.
“We are hoping that through existing industrial policies in some industries — for instance biotechnology, green energy, smart health applications and smart transportation — we can induce some investment from the private sector,” she said at a press conference in Taipei.