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Taiwan financial firms disparate on economic outlook
Publication Date : 25-06-2012
With most of Taiwan's financial firms having completed their shareholders' meetings, the heads of these companies have offered competing views on how the economy will fare in the second half.
Some financial company heads have formed the consensus that the European debt crisis will continue to be a crucial yet uncertain factor, even though the vote in Greece has mitigated concerns that the eurozone may crumble.
According to Tsai Hung-tu, chairman of Cathay Financial Holding, the European debt crisis will not be resolved in the short-term and may last for the whole of 2013. While a recovery in the continent may be possible next year, its strength will be weak. Against this backdrop, Taiwan's export-oriented economy looks murky right now and will be dictated by financial situations around the world, he said.
Tsai Ming-chung, chairman of Fubon Financial Holding, said the local economy will face adversity due to negative developments from Taiwan and abroad. Locally, the stock capital gains tax controversy is expected to drag on, while internationally things look dire with the European debt crisis, tepid recovery of the US economy and a slowdown in China, he said.
“The government should put a stop to all controversial issues so that we all work together on the economy,” he said.
Tsai Yiu-tsai, chairman of Mega Financial, said the economy for the second half is “unpredictable” at best. While the global economy may hit the bottom in the third quarter, how long it will stay at the bottom remains to be seen, he said.
“The global financial crisis a few years back didn't seriously hurt the real economy, resulting in a quick recovery. Yet the debt crisis this time has done huge damage to the real economy, and how long it will take the financial industry to get out from the bottom is hard to say,” he stated.
While most bankers took a conservative, even pessimistic, view on the economy, some offered a glimpse of hope. For example, Wu Tung-liang, chairman of Taishin Financial, said that Taiwan's economy should pick up in the third and fourth quarters.
He said the European crisis has been temporarily alleviated with the Greek vote. That, coupled with China's various stimulus measures, is expected to contribute to a bottoming-out in the second half, he said.
Yang Wen-chun, president of China Development Financial Holding, offered a similar view, saying the US' decision to refrain from a third round of quantitative easing measures indicates its economy is recovering slowly. “This bodes well for information technology operators,” he said.