The UK’s decision to leave the European Union is expected to affect Taiwan’s exports and stocks, while currency fluctuations may also be in store.
Thursday’s referendum in the UK resulted in a win for the Brexit camp. The result came as a surprise to many and has prompted David Cameron to announce his resignation as prime minister.
Gordon Sun of the Taiwan Institute of Economic Research predicts that global economic uncertainty following the result may deter manufacturers from placing orders with Taiwan.
"Manufacturers who respond to a mood of panic by delaying orders may affect our second-half exports. So Taiwan’s trade and economic performance, which was already tough to turn around, may well now undergo a new wave of pressure," said Sun.
The result of the referendum has brought major pressure to sell for many of the world’s markets. The stock market in the US may be expected to fall sharply on Friday, with knock-on effects for Taiwan’s shares by Monday. Sun also said that investors may turn to currencies to hedge risks in the short term. This may put strong pressure on the yen and the New Taiwan dollar in the weeks ahead.