Weak growth, sales caused stock plunge: FSC

The China Post - - FRONT PAGE - BY ENRU LIN

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.

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