Merrill Lynch downgrade Taiwan's rating. Borrowing more expense

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Merrill Lynch downgrade Taiwan's rating. Borrowing more expense Chen makes a costly political point, which was really unnecessary since the council was dormant for 15 years anyway. The financial cost: 1) More disintermediation 2) Harder to attract FDIs 3) Institutionals burn up liquidity to buttress market 4) Downgrading Taiwan's rating, which makes future borrowing more expense 5) Chen will need to turn up the printing press What CSB did was relatively mild, and yet see the financial impact already? Do you think he is smart enough to get the message now? Here's the article. Taiwan shares drop 1.3% Friday TAIPEI: (AP) - Taiwan shares fell Friday after U.S. investment bank Merrill Lynch downgraded the market's prospects, with flat-panel companies among the worst performers. The Weighted Price Index of the Taiwan Stock Exchange dropped 89.3 points, or 1.3 percent, to 6,553.66. Merrill Lynch downgraded its rating on Taiwan Thursday on expectations the main board's rally since November had lost steam. The investment bank also cited concerns about political tensions with China as well as a lack of cues to spur buying in local stocks. "The Merrill Lynch report had significant impact on investor sentiment, which was already weak when the index failed to pass 6,700 yesterday,'' said Alex Huang, an assistant vice president at Barits International Securities. Taiwan's President Chen Shui-bian angered Beijing earlier this week by terminating a committee dedicated to uniting the self-ruled island with China. Taiwan and China split amid civil war in 1949, but Beijing still claims sovereignty and occasionally threatens force if the island moves toward formalizing its de facto independence. Among the decliners Friday, AU Optronics, Taiwan's largest flat-panel maker by revenue, dropped 4.5 percent to 51.2 New Taiwan dollars. Rival Chi Mei Optoelectronics fell 4.2 percent to NT$47.9. Panel companies fell on speculation that prices for some displays would be cut by 10 percent, traders said. Next week, investors will be watching February revenue announcements by listed firms, traders said.