Market capitalization shrinks 5.3% in a week


TAIPEI–Market capitalization on the Taiwan Stock Exchange (TWSE) fell about 5.3 percent this week from the previous week amid turmoil on the global financial markets due to the volatility of the China market and a falling Chinese yuan, according to the TWSE.

On Taiwan’s main board, market cap fell NT$1.3 trillion (US$38.8 billion), or 5.3 percent from a week earlier, to NT$23.19 trillion in the week ending Jan. 8.

The drop was in line with the losses on the local equity, where the weighted index fell 444.09 points or 5.33 percent this week to close at 7,893.97 on Friday.

The local main board encountered massive selling by foreign institutional investors amid mounting worries over the mainland China economy and the weakness of the yuan, which could lead to an increased exit of foreign funds from the region.

In the first trading week of the year, foreign institutional investors sold a net NT$40 billion worth of shares on the local main board, mostly large-cap stocks, the TWSE data showed.

The TWSE fell in the first four sessions of the week then staged a mild technical rebound, which failed to recoup the earlier losses, amid concerns over further volatility in the global financial markets.

The weighted index, excluding financial stocks, lost 5.01 percent; the index excluding electronics stocks fell 5.39 percent; and the index excluding the electronics and financial sectors dropped 4.60 percent, the statistics indicated.

The glass and ceramic sub-index shed 8.34 percent, the biggest decline among the some 30 sectors in the market.

The FTSE TWSE Taiwan 50 Index, which comprises the top 50 firms, including Taiwan Semiconductor Manufacturing Co., shed 6.1 this week, while the Formosa Stock Index, which comprises all listed companies on the main board and the over-the-counter market, lost 5.22 percent, the TWSE said.

Stock turnover on the local main board this week totaled NT$399.93 billion, with trading volume in the semiconductor sector reaching NT$86.18 billion, accounting for 21.55 percent of the total, the biggest proportion on the market, the TWSE data showed.

The optoelectronics sector was second with turnover of NT$54.8 billion, which made up 13.7 percent of the total, the TWSE said.