Fidelity Investments gives hope to patient stock buyers


James Renwick, The China Post

Securities analysts from Fidelity Investments on Tuesday gave a more reassuring outlook for the Taiwan stock market in the second half of the year and into 2002, saying that the island’s economy is basically robust. They added that while in the short-term the market will continue to be volatile, over a longer period it should stabilize and recover. “At the moment, foreign investors are being put off buying Taiwan stocks by a negative sentiment which is plaguing the economy and this is resulting in the poor performance of the stock market,” said Julian Lao, company vice president of investment, in a presentation to journalists.

“The market is simply not coping with the continued bad news that is coming out of the U.S., and this is what is making the stock market so unstable,” he added. “Imports and exports are down, and both the domestic and external markets are depressed. But while the prospects for many Asian economies this year are grim, the economies of Taiwan and Hong Kong are likely to see some improvement,” he continued. The Gross Domestic Product (GDP) growth of Taiwan has shrunk to its lowest level since the ’70s. Lao, however, offered an optimistic outlook for the island’s economy over the next few years with four factors that he said would improve the economic situation.”Entry into the World Trade Organization (WTO) will help exports and give greater access to markets, and lower costs. The “three links” will bolster the economy by reducing transport costs and increasing tourism to Taiwan. Also the proposed Taipei to Kaohsiung high-speed rail link and the construction of new power plants will help the economy.”