Taiwan's Stock Market Drops a Further 4.9% On Continuing Fears About Banks' Bad Loans
TAIPEI -- Stocks tumbled 4.9% in Taiwan on continuing worries about bad loans at local banks.</br></br>Most other Asian markets were also weaker, while slumping growth and auto-maker stocks dragged down most European markets. That left the Dow Jones World Stock Index down 1.30%, or 2.84, to 216.05. Excluding the U.S., the index fell 1.07%, or 1.70, to 157.31.</br></br>A series of uncertainties has caused the Taiwan stock market to fall more than 30% since President Chen Shui-bian was elected in March, ousting the long-ruling Kuomintang. Political battles between Mr. Chen and the opposition-controlled legislature have put a question mark over his government's ability to pass crucial legislation. Local banks are faced with rising bad loans, and the extent of the problem isn't known because banks here generally don't follow international standards in reporting such loans.</br></br>With so much uncertainty rattling investors, "any news can be an excuse to sell," said Roger Yang, a fund manager at ABN Amro Asset Management. Mr. Yang said concerns about rising bad loans at local banks were one of the main reasons behind the drop in share prices.</br></br>Separately, the government refused to release the results of a consumer-confidence survey. The decision was reported yesterday in the Economic Daily News, but didn't immediately affect market sentiment. It was the first time since the quarterly survey began in 1998 that it has failed to come out.