Tsai's National Day address 'neutral' to equity market: analysts

Taipei, Oct. 10 (CNA) President Tsai Ing-wen's (???) address at the Oct. 10 National Day celebrations which emphasized support for maintaining the status quo across the Taiwan Strait is unlikely to surprise the local equity market, analysts said on Monday. They said that Tsai's message in her National Day address contained no new ideas related to cross-strait ties and most investors are expected to view her overall message as "neutral" in terms of market movements. In the speech, Tsai avoided mentioning "the 1992 consensus" which Beijing has established as a precondition for talks. Under the consensus reached in those negotiations Taipei and Beijing agreed there is only one China, with the two sides having their own interpretations as to what that means. Tsai reiterated that her Democratic Progressive Party government, which took power on May 20, will leave the status quo unchanged and preserve Taiwan's democracy, adding that the new government wants to establish a consistent, predictable and sustainable cross-strait relationship." Hua Nan Securities Co. Chairman David Chu (???) said that Tsai's speech offered nothing new in the area of cross-strait ties and is therefore unlikely to result in any change in the current stand-off between Taiwan and China. Since Tsai's inauguration on May 20, direct contacts between Taipei and Beijing have been severed, though Tsai has repeatedly urged China to resume bilateral talks. Between May 20 and Sept. 25, the number of Chinese tourists visiting Taiwan fell 27.2 percent from the previous year and the market has attributed this to deteriorating cross-strait ties. Chu said that the local financial market has become used to Tsai's stance and the latest speech was unlikely to have much impact on equity movements when trading on the local stock market resumes on Tuesday. He added that unless China comes up with new measures aimed at Taiwan's economy, the local equity market is likely to remain in consolidation mode in the near future. The market was closed on Monday for a public holiday. On Friday, the weighted index on the Taiwan Stock Exchange closed down 0.2 percent at 9,265.81. So far this year, the local main board has risen 11.1 percent on the back of aggressive foreign institutional buying. Echoing Chu, MasterLink Securities Investment Advisory Co. President Liu Kun-hsi (???) said that Tsai's speech would not impact local equities but he cautioned that external factors, such as the U.S. presidential election and worries over an interest rate hike by the U.S. Federal Reserve in December, could weigh on global financial markets, including Taiwan. Liu said that since the local equity market has made a strong showing in recent months with the weighted index even passing 9,300 points at one point, investors should keep alert over a possible pullback. Chu said that future movements will depend on whether foreign investors continue to move funds into Taiwan and buy local equities. (By Esme Jiang and Frances Huang)