Shares dropped 0.6 percent yesterday on reduced trading, shedding 42.20 to 6,901.48, as investors said a short-term pullback is possible before the March 20 election -- and that the recent surge to break 7,000 on the TAIEX was not healthy.
"The benchmark fell on sell-offs meant to lock in profits ahead of the presidential elections," said Renee Chan (
"But foreign investors are still buying, banking on the big bull run before election day," she said.
Overseas investors bought a single-day record high of US$19.4 billion in stock last Tuesday and a record high of US$64.4 billion last week, Chan said, citing statistics compiled by the Taiwan Stock Exchange Corp.
Another analyst said the lack of clarity in the election is likely to hold back investors before the vote.
"The benchmark, bolstered by quite a few short-term speculators, is likely to hover between 6,800 and 7,000 points in the next two weeks," said Shih Sheng-fa (施勝發), a manager in the asset management department at Prudential Securities Investment Trust Co (保誠投信).
Last week, the TAIEX hit 7,034 on Thursday but fell back to 6,943.68 on Friday.
Shares in Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order computer chips, dropped 1.5 percent to NT$66 yesterday. Rival United Microelectronics Corp (聯電) shed 1.8 percent to close at NT$33.40.
Though some have suggested that the TAIEX may continue sliding, Chan expressed confidence in the market, saying that as long as the index stays above 6,800 points, a bullish market may be foreseeable in the near term.
Shih is less optimistic, however, saying that the post-election benchmark is not likely to experience another jump as big as the one last Thursday.
"On the contrary, post-election stock performance may be disappointing," Shih said.
"Even if there's an uptrend, there will be little room for a big jump since businesses in April and May are seasonally slow," Shih said.
In the long run, Shih said that the stock market will reflect the nation's improving economic fundamentals and surge to between 7,500 and 8,000 points in the third quarter, led by the electronics and financial sectors.
Some market watchers predict that the benchmark will rise to break 8,000 and push toward 9,000 by the year's end.
Despite the market's slow upward trend, a local analyst, who declined to be identified, said yesterday that politics may have a negative impact on the market's future performance.
He said that the government is the biggest behind-the-scenes booster of pre-election stock performance. He also said that many Taiwanese enterprises had posed as overseas investors to buy in to the TAIEX in support of certain political parties.
Political uncertainty, therefore, clouds the TAIEX's performance, he said, adding that, "The market gets riskier as election day draws closer and possibly triggers irrational movements."
Economic uncertainty also poses a threat since Taiwan is likely suffering both deflationary and inflationary pressures as a result of rising raw-materials prices and declining commodity prices while Asian countries -- including Taiwan -- resist appreciation of their under-valued currencies.
The analyst expressed a bearish view on post-election stock performance. He said that if President Chen Shui-bian (
The analyst said that if Chinese Nationalist Party (KMT) Chairman Lien Chan (
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)