The China Post news staff
Securities analysts said that the weakened consumer confidence, high unemployment rate, and political standoff on the domestic front plus the soaring energy prices as well as the slumping U.S. housing market and the subprime mortgage crisis abroad have stalled the leap of the local benchmark index from reaching 10,000 points.
The general price index edged up 27 points to close at 8,722 last Friday.
Many analysts are now pinning their hopes on the second half of 2008, despite a possible slowdown in world economic expansion.
The stock market is expected to remain laggard during the first quarter of next year due to the intensified domestic political bickering and confrontation over forthcoming legislative election on Jan. 12 and presidential election in late March, they said.
Past records show that Taiwan share prices mostly declined or remained stagnant starting from three months ahead of the parliamentary elections due to uncertainties.
The long Chinese Lunar New Year holidays in early February and the immediately following presidential election on March 22 will only add more market uncertainties.
Most opinion polls show the opposition camp is expected to score a big win in the legislative election while opposition Presidential candidate Ma Ying-jeou maintains a sizable lead over candidate Frank Hsieh of the ruling Democratic Progressive Party (DPP).
Former President Lee Teng-hui urged Taiwan voters to wise up next year when he admitted that "we ourselves are being punished for electing the wrong person as [president]" for two terms.
Reflecting the views of most people in Taiwan, Lee also expressed his shock that over 10 senior officials like ministers were jailed on charges of corruption within seven to eight years under the leadership of President Chen Shui-bian, who doubles as DPP chairman.
Securities analysts said that all seasoned investors and political observers know that the public outcries against Chen and his DPP do not guarantee the election victory of the opposition camp because there were so many surprises pulled off on the eve of major elections.
Two mysterious bullets that slightly harmed Chen and the voluntary suspension of the election campaign by opposition leaders gave Chen four more years in office, they said.
The false charge of opposition candidate's alleged buying votes after the deadline of official campaign activities in the most recent Kaohsiung mayoral race allowed the DPP to retain the seat.
These were one of the major factors used to explain why domestic investors are rather hesitant when betting on the stock market before they have the final election outcomes, analysts explained.
But they agreed that Taiwan's economy will not get worse since both presidential candidates have publicly vowed to improve economic relations with China, including establishing direct and regular transport links and opening doors to mainland Chinese tourists, in order to take advantage of China's fast economic growth.
Having Chen out of the picture and improving ties with China are among the positive factors for the stock market in Taiwan.
Most analysts expect the share price index to hit over the 10,000 point mark in the second half of next year, while the more bullish ones bet on a jump to 125,000 points.
Shares of enterprises engaged in new high-tech products, construction materials, transport services, tourism, and retailing are expected to be among the major winners, they said.