With the stock market remaining in the doldrums, most analysts are optimistically hoping for a rebound in the third quarter, according to a poll by a local Chinese-language newspaper over the weekend.
Most fund managers, who usually readjust their investment strategy at this time of the year, believe that stocks should stage a recovery in the third quarter.
Fund managers expect the TAIEX to rise to between 5,600 to 6,000 points.
There are a number of reasons behind the rationale for a rebound, the survey said.
First, stock market valuation -- or the price of stocks relative to future earnings -- is relatively low.
Second, the Legislative Yuan, currently in session, may soon pass finance-related laws which may be interpreted by the market as positive.
Third, some industrial sectors may start recovering by the end of the third quarter.
Fourth, the start of the rights issues season -- when companies issue stock dividends -- may push the stocks of some companies higher.
Fifth, the increasing chances that US stock markets may rebound in the third quarter, helping bolster investor sentiment domestically.
Sixth, the government may introduce new economic policies on the heels of the establishment of the president's Economic Development Advisory Council (
However, John Hsuan (宣明智), deputy chairman of United Microelectronics Corp (UMC, 聯電), told journalists over the weekend that the semiconductor market may not recover in the second half is generally expected.
On Friday, UMC officials said that the company expects sales to decline some 35 percent in the second quarter with its factory utilization rate standing at only around 45 percent.
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