Taipei, Feb. 5 (CNA) Wellington Koo (顧立雄), chairman of the Financial Supervisory Commission (FSC), has urged investors to maintain their faith in Taiwan’s stock market despite its tumble on Monday.
Though the Taiwan Stock Exchange’s benchmark index took a beating, falling 1.62 percent on Monday, Koo said the decline reflected heavy losses in United States markets at the end of last week rather than a problem with fundamentals in the local market, which remained sound.
The Taiex fell 179.98 points, or 1.62 percent, to 10,946.25, after moving between 10,885.43 and 10,970.30, on turnover of NT$128.19 billion (US$4.38 billion).
The selling came after the Dow Jones Industrial Average shed 665.75 points, or 2.54 percent, on Friday, the steepest daily loss since June 2016.
Investors in the United States were worried that strong job data in the U.S. in January hinted at a quicker rate hike cycle there, analysts said.
Koo said Taiwan’s economy is showing steady growth with the support of strong exports at a time of solid global demand. The growing economy and high dividend yields on local stocks make Taiwan attractive to foreign investors, he argued.
Last week, the Directorate General of Budget, Accounting and Statistics reported Taiwan’s gross domestic product grew 3.28 percent year-on-year in the fourth quarter, beating a DGBAS forecast in November of 2.3 percent growth, largely on robust export performance.
In 2017, Taiwan’s economy grew 2.84 percent from 2016, compared with an earlier estimate of a 2.58 percent increase, the DGBAS’s data showed.
According to Mega International Investment Services Corp., the average dividend yield in Taiwan’s stock market currently stands at a relatively competitive 3.75 percent.
Koo said the FSC, Taiwan’s top financial regulatory agency, has not yet imposed any measures to stabilize the market in response to the external turmoil, but Mega International Investment suspected government-led funds entered the market late in Monday’s trading session to reduce the market’s losses.
(By Tsai Yi-chu and Frances Huang)
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