Biotechnology sector rocked by Ma-Wang political struggle
By Ted Chen,The China PostTAIPEI, Taiwan -- Taiwan's biotechnology sector yesterday saw a rapid decline, with the industry index losing 2.7 percent on the Taiwan Stock Exchange (TWSE), and down 3.3 percent on the over-the-counter-GreTai Securities Market. This was coupled with rocking reports concerning the beleaguered Legislative Yuan Speaker Wang Jin-pyng, who may be deposed before he can carry out policy amendments designed to benefit the sector.
September 10, 2013, 12:04 am TWN
Market observers have since branded shares of Taiwan's biotechnology sector as among the “Wang-syndrome” stocks, citing his support for policy amendments designed to relax regulatory measures imposed on the sector, in particular restrictions on class two medical devices. Drug and pharmaceutical companies bore the brunt of yesterday's downturn, with the shares of over seven companies tumbling seven percent, the maximum daily movement allowed on the TWSE.
Institutional investors noted that as yesterday's downturn was derived from political factors, the slump is not expected to persist, while retaining their upbeat outlook on Taiwan's biotechnology sector.
Wang is accused of obstruction of justice, for contacting former Justice Minister Tseng Yung-fu (曾勇夫) and lobbying on behalf of opposition party caucus whip Ker Chien-ming's (柯建銘), in a lawsuit.
The market is scrutinizing the ongoing Ma-Wang political struggle, in particular as to whether the government's ability to implement the four major upcoming economic policies will be affected. Policies include the referendum for the construction of the fourth nuclear plant, approval of the recently inked cross-strait service industries trade pact, the pension reform, and the 2014 fiscal budget.
Despite recent developments, the TWSE closed at 8192 points, above the previous session, gaining 28 points, amid rumors that government-run funds were ordered to stepped in to prop up the index.
Meanwhile, following a conference between securities brokerage firms and the Financial Supervisory Commission (FSC), the regulator stated that the small gain recorded at yesterday's trading indicate the soundness of Taiwanese markets. The FSC also said that the cross-strait service industries trade pact will bring more good than harm, and urged the government to expedite its approval.
Incidentally, the so-called “first shot” at deregulation designed by the FSC to stimulate trading volume came into effect yesterday, allowing dealers of security brokerage companies to place buy or sell orders for shares at the intraday limits of 7 percent above or below a share's opening price.
However, dealers who did not wish to be identified, stated that the FSC's attempts were not as potent as those launched against Wang, while expressing regret over the dashing of recent hopes for a recovery in investor confidence.