The TAIEX might rise to hit 7,200 points in the third quarter to reflect the nation's sound economic fundamentals, HSBC Asset Man-agement (Taiwan) -- a fund unit of the world's second-biggest bank by market value -- said yesterday.
"Following the second quarter's slow business, the third quarter may be a good time to buy [shares] and to see an upside of 7,200 points," said Victor Shih (
The third quarter is usually the high-tech industry's boom season, according to Shih.
The UK lender had previously estimated the TAIEX might hit 7,400 after the March 20 election.
Shih expressed confidence in TAIEX, based on the stock market's averaged return of equity levels at 12.6 percent with a high 44 percent of profit growth, with interest rates remaining low.
The TAIEX declined by 52.5 points to close at 6,620.36 yesterday. The benchmark index added 1.1 percent for the week.
Shih made the remarks at a tea party yesterday afternoon held to welcome the UK lender's new head, Christina Sung (
Sung was formerly Taiwan chief for JF Asset Management. She left that job last October after working for the company for 18 years and took up her new post last week.
She said that the uncertainties triggered by the continuing electoral dispute may linger on to negatively impact the economic fundamentals in the coming months.
When asked if the TAIEX had completely bottomed out, Sung laughed and said, "we don't know yet since political risks are hard to measure and are in the hands of the national leader."
Shih, however, was more optimistic about under-valued Asian shares, especially those in Taiwan and South Korea, whose economies have recovered quickly since last year.
If [global index compiler] MSCI upgrades Taiwan to developed market status in its global equity indexes, a sizable amount of international pension funds may flood into Taiwan's market to buy shares, Shih said.
HSBC is therefore advising its investors to invest in shares in Taiwan, South Korea and Malaysia, he said.
Sung said yesterday that she would contribute her expertise in the mutual fund business to help formulate the company's asset management strategies.
She said that all the nation's 43 fund and trust investment firms were anxiously awaiting the establishment of a domestic pension scheme, which could boost the nation's NT$2 trillion-worth fund by more than NT$100 billion in the near future.
In order to be well-prepared for such new business opportunities, Sung said that HSBC would diversify its product line in an effort to satisfy future pension-fund investors by introducing know-how from the lender's international team of multi-managers.
HSBC will stress the importance of performance, services and financial innovations, in addition to the inherent advantages in its brand name, an existing client base and a pool of financial talent.
Sung was recruited out of retirement recently to head the fund unit in the hopes of bringing back its past glory as the nation's No. 1 fund-investment firm.
HSBC Asset Management (Taiwan) is comprised of HSBC Asset Management (Taiwan) Ltd, which managed 18 mutual funds, and HSBC Investment Managers (Taiwan) Ltd, which offers consulting services and mutual funds.
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