Merrill Lynch & Co recommended investors cut holdings of Taiwanese stocks as protesters supporting the opposition party demand a recount of the presidential election, in which President Chen Shui-bian (陳水扁) won a second term.
Spencer White, Merrill's regional equities strategist, cut Taiwan's recommendation to "market weight" from "overweight," in a report released late on Monday.
"We expect the Taiwanese equities to consolidate over the next quarter as the market digests the ramifications of the election result," White wrote in the report. "I see little opportunity for upside surprises in either earnings or liquidity."
ABN Amro Asia Ltd and Morgan Stanley on Monday recommended investors switch to so-called defensive stocks such as Taiwan Cellular Corp (台灣大哥大), Chunghwa Telecom Co (中華電信) and financial-related companies after the TAIEX slid 6.7 percent, its biggest drop in eight years.
The TAIEX had climbed 18 percent this year through Friday, making it the sixth-best performer among the world's 59 biggest benchmarks in that time, according to Bloomberg data.
"You may continue to see a bit of weakness until this whole situation is resolved," said Eswar Menon, who helps manage US$250 million at Loomis, Sayles & Co in San Francisco. "In the Taiwanese market, clearly the government does play a role."
Menon said he wasn't selling his holdings of Taiwanese stocks such as United Microelectronics Corp (聯電), adding that he may buy should share prices fall further.
White said there were better opportunities in Hong Kong stocks, which he raised to "overweight" from "market weight." He said the prospect of an appreciating yuan and improved economic growth in Hong Kong made the city's stocks, particularly property companies, better investments.
Hong Kong's Hang Seng Index recently rose 0.6 percent to 12,620.47. Sun Hung Kai Properties Ltd (新鴻基地產), Hong Kong's biggest developer by market value, advanced 1.4 percent to HK$70.50.
"Hong Kong's investment appeal just gets better," White said in his report.
ABN Amro recommended holding stocks such as Taiwan Cellular and Chunghwa Telecom because both phone companies yield 7.2 percent in dividends, the broker said in a research report. The TAIEX yields about 1.7 percent.
Taiwan Cellular shares added 4 percent to NT$31.30, while Chunghwa Telecom gained 2.7 percent to NT$56.50 on the TAIEX yesterday.
Taiwanese financial-related shares led gains among stocks that rose on the local bourse. Cathay Financial Holding Co (國泰金控), which yields about 2.5 percent, climbed 4.4 percent to NT$60. Fubon Financial Holding Co (富邦金控), which returns 3.6 percent, rose 3.4 percent to NT$33.40.
Morgan Stanley said the TAIEX may drop as low as 5,800 in coming weeks, without specifying the time frame further.
"Assuming the political unrest is not prolonged, we recommend investors to accumulate shares on weakness, with a focus on the financial sector," Morgan Stanley said in a report.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last