China Rebar Group financial scandal prompted major investors to dump their holdings. Although opening slightly higher, prices of most stocks soon drifted lower with the weighted index, the market’s key barometer, moving down 79.97 points to close at 7,618.55.
The bourse opened at 7,724.10 and fluctuated between 7,748.96 and 7,599.55 during trading. A total of 5.74 billion shares changed hands on a market turnover of NT$160.62 billion.
Local and foreign institutional investors net sold a combined NT$2.556 billion.
All eight major stock categories lost ground, with construction shares suffering the steepest drop of 5.2 percent, followed by paper and pulp stocks at 5.1 percent, foodstuff issues at 3.9 percent, cement shares and textile stocks both at 2.4 percent, plastics and chemicals issues at 1.5 percent, banking and financial shares at 1.0 percent, and machinery and electronics stocks at 0.6 percent.
Losers far outnumbered gainers 1,078 to 223, with 104 stocks remaining unchanged.
Analysts attributed the recent falls in Taiwan share prices to the general price declines at most stock markets in the region induced by the announcement by Thai government officials of a plan to limit stakes of international investors.
The domestic financial crisis touched off by the heavy losses of enterprises in the China Rebar Group and the unraveling of possible scams following deeper investigations by the financial supervisory and law enforcement authorities.
Scholars pointed out that the Rebar scandal reflected the same pattern of the collapse of many listed enterprises that have gone under in recent years.
They suggested that integrity of top corporate managers and sound corporate governance should be among the top considerations for investors to decide where they want to invest their capital.
Many local and foreign economists noted the Rebar case should not severely affect the overall economic development for Taiwan in the new year.
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