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10,000-point Taiex no longer a 'regular pattern': FSC head

2018/12/17 16:42:25

Financial Supervisory Commission (FSC) Wellington Koo (顧立雄)

Taipei, Dec. 17 (CNA) The head of Taiwan's financial regulatory agency has changed the government's outlook on the stock market, saying the market's benchmark index staying above 10,000 points is no longer a "regular pattern" because of external factors.

Financial Supervisory Commission (FSC) Wellington Koo (顧立雄) expressed caution about Taiwan's market at a legislative hearing Monday, reversing previous government declarations that a Taiex of 10,000 or higher was a normal state of affairs.

The Taiex had remained about 10,000 points for about 17 months starting in mid-May 2017, prompting several government officials, including Vice Premier Shih Jun-ji (施俊吉), to describe the level as "normal" and as an achievement of the government.

But since the Taiex closed below 10,000 points Oct. 11 to end the 17-month streak, it has returned above that level only three times and closed at 9,787.53 on Monday.

Koo's comment came in response to a question from opposition Kuomintang legislative caucus secretary-general Tseng Ming-chung (曾銘宗) on whether the government's previous upbeat outlook on the market needed to be revised after its recent fall.

But, Koo continued to defend the market's liquidity, saying the combined average daily turnover of the main Taiwan stock exchange and the over-the-counter market reached about NT$160 billion (US$5.18 billion) in the first 11 months of this year.

Koo said he hoped average combined turnover could stay at NT$160 billion a day next year to keep Taiwan's stock markets liquid.

Monday's turnover shrank to a December low of NT$77.94 billion, however, as many foreign institutional investors were away for the Christmas and New Year holidays.

Li Fang-kuo (黎方國), chairman of Uni-President Investment Consulting, told CNA on Sunday that the Taiex has consolidated recently but should challenge 10,500 in the first quarter of 2019 before falling to as low as 9,500 in the second and third quarters.

The Taiex could then rebound to 11,500 in the fourth quarter of 2019 as the result of stimulus measures put in place by the government before the next presidential election in early 2020, Li said.

(By Tien Yu-pin and Frances Huang)