The stock market is expected to experience another volatile week as investors remain jittery amid the lingering political uproar from the presidential election, analysts said yesterday.
"I don't expect the local stock market to return to health soon as investor confidence remains weak amid unresolved political turmoil," Jones Wang (王源錦), a deputy manager at ABN-AMRO Asset Management Taiwan, said yesterday.
Although there were no clashes during the massive rally in front of Presidential Office led by the Chinese Nationalist Party (KMT) on Saturday, the bickering over election results will continue to weigh on the local bourse over the next five sessions, Wang said.
The post-election political disputes caused the benchmark TAIEX to drop by 10 percent over the past week to finish at 6,132.62 points on Friday.
In reaction to the political row, overseas fund managers unloaded US$12.2 billion worth of stocks last week, a far cry from their massive purchases in the months prior to the election. Foreign investors hold about a quarter of Taiwanese shares in terms of stock value.
"I believe foreign fund managers will slow down their selling this week, awaiting the result of a vote recount," Wang said.
The broader Taiwan weighted index is likely to fluctuate between 5,850 points and 6,330 points this week, Wang said.
Building on the optimism, the weighted index may have a chance to rebound in the following trading sessions, given that Saturday's rally may herald a solution to the political chaos, said Lin Yu-ming (
"As long as Taiwan's semiconductor sector remains strong fundamentally, I'd suggest investors snap up some of the shares before a solid rebound," Lin said.
George Wu (吳裕良), an analyst at Primasia Securities Co, also said that prices are unlikely to take another nosedive this week as the political stalemate may start to thaw after President Chen Shui-bian's (陳水扁) positive response to the opposition pan-blue camp's requests.
Flat-panel shares are expected to stay firm, led by Chi Mei Optoelectronics Corp (
Chi Mei, the nation's No.1 maker of large-sized flat panels for digital televisions, said its sales last month increased about 8 percent to NT$9.25 billion from the previous month, and a sharp 70-percent rise from a year earlier.
A stronger March and second- quarter sales are expected to follow the fair first quarter, a conventionally slack season for the high-tech industry, Chi Mei vice president Hsu Chun-hwa (
Shipping and China-related shares, including the nation's biggest shoe maker, Pou Chen Corp (
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