Political factors that have kept affecting the local bourse in the past months have come to an end following President Chen Shui-bian's (陳水扁) inauguration yesterday, analysts said yesterday.
In light of sound fundamentals of the nation's industries, the outlook for the stock market remains rosy in the long run, they said.
With the absence of expected celebratory bulls, TAIEX dropped slightly by 45.25 points, or 0.77 percent, to close at 5,815.33 yesterday. Turnover was NT$109.3 billion.
The benchmark index plunged by over 400 points, or 3.18 percent, on the inauguration day four years ago.
"President Chen's speech didn't surprise most investors. It neither offered any bullish incentives to the stock market yesterday," said Wu Peiwei (吳佩偉), a portfolio manager who helps oversee a NT$600-million fund for ABN-AMRO Asset Management Taiwan Ltd.
The selling pressure thus came from investors who reaped profits from a rebound of 302 points on TAIEX on Wednesday, Wu added.
Other investors echoed, saying that the local bourse should be able to leave the non-economic influences behind and did not think the ballot recount could do harms to the stock market.
"Political factors have come to an end following President Chen's inauguration yesterday," said Calvin Chen (陳程坤), a manager at Yuanta Core Pacific Capital Management (元大京華投顧).
But the local bourse may still be weak along with international stock markets in the near future, ailed by influences such as an expected rise in interest rates, skyrocketing oil prices and the unrest in Iraq, Chen said.
Selloffs by foreign investors may not ease until the time and scale of a rise in interest rates in the US becomes clear next month, he added.
Foreign investors, who dumped a net of NT$4.4 billion worth of shares yesterday, have got rid of a net of NT$125.05 billion of Taiwanese shares since April 27, according to Taiwan Stock Exchange statistics.
George Wu (
The positive stance that the incoming economic affairs minister holds on the opening up of local companies' investment in China would help improve foreign investors view of the local bourse, he said.
"We are confident about the stock market's prospects, which has hit bottom at around 5,400 points," Wu added.
The TAIEX closed at 5,482.96 points on Monday after hitting as low as 5,450.72 in the mid-session, following a harsh statement from Beijing about President Chen.
For investment targets in the next half of this year, both Wu and Calvin Chen recommended electronics shares and China-related shares for the second half of this year and suggested investors avoid raw materials shares.
Financial shares could be a good investment, in light of benefits expected from a rise in interest rates, if the amendment to financial restructuring fund regulations is passed, Calvin Chen added.
However, ABN-AMRO's Wu was not as bullish, saying that economic performances in the Asian region may be weakening following China's clampdown measures.
Foreign investors' benefits from capital gains and exchange rates in the region could be shrinking accordingly and, thus, may not be as keen on Asian markets as before, he said.
The bourse could be influenced be such factors and its outlook dampened as a result, Wu added.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
DOLLAR SIGNS: The central bank rejected claims that the NT dollar had appreciated 10 percentage points more than the yen or the won against the greenback The New Taiwan dollar yesterday fell for a sixth day to its weakest level in three months, driven by equity-related outflows and reactions to an economics official’s exchange rate remarks. The NT dollar slid NT$0.197, or 0.65 percent, to close at NT$30.505 per US dollar, central bank data showed. The local currency has depreciated 1.97 percent so far this month, ranking as the weakest performer among Asian currencies. Dealers attributed the retreat to foreign investors wiring capital gains and dividends abroad after taking profit in local shares. They also pointed to reports that Washington might consider taking equity stakes in chipmakers, including Taiwan Semiconductor
RSS