Non-economic factors becoming a non-issue for market: MOF chief
April 10, 2014, 12:00 am TWN
TAIPEI--The local market is turning its back on negative non-economic factors and investors are shifting their attention back to fundamentals after protesting students announced an end to their occupation of the Legislative Yuan's main chamber, a top finance official said Wednesday.
In a meeting of the finance committee of the Legislative Yuan, Finance Minister Chang Sheng-ford (張盛和) said Taiwan has sound economic fundamentals and expressed confidence in the movement of the local market.
Chang said political uncertainty in the local market has been fading and that local share prices are likely to ride the wave of healthy fundamentals to go higher.
The protesters of a trade-in-services agreement signed by Taiwan and China in June 2013 announced Monday that they will withdraw from the Legislature's main chamber Thursday to terminate the occupation that began March 18.
Before the student occupation, Chang had predicted that the weighted index on the Taiwan Stock Exchange could hit 9,000 points in the near term.
Led by the bellwether electronics sector, the weighted index on the main board closed up 0.47 percent, at 8,930.57 points Wednesday.
Chang said recent strong buying by foreign institutional investors has shown that foreign investors still have faith in the local economy and the outlook of the local market, although the political standoff at the Legislative Yuan haunted market sentiment.
As of Tuesday, foreign institutional investors served as the main net buyers of local shares for 12 trading sessions in a row. According to the Taiwan Stock Exchange, foreign institutional investors have bought NT$77.4 billion (US$2.58 billion)-worth of local shares since March 21.
Chang said some foreign brokerages have even forecast that the weighted index will top 9,000 points this year. Among them, UBS Securities expects the index to hit 9,650 points, while Goldman Sachs has said local share prices could reach 9,800 points.
Echoing Chang, Tseng Ming-chung (曾銘宗), chairman of the Financial Supervisory Commission, said the institutional buying reflected foreign investors' upbeat assessment of the local market in the mid- to longer term.
The impact of the political standoff at the Legislative Yuan appears short-lived, Tseng said.