Taiwan's stock market is expected to head into the doldrums over the next few days as cautious investors await first-half earnings results, amid a raft of warnings from tech bellwethers, market watchers said yesterday.
First-half earnings from key companies, including Taiwan Semiconductor Manufacturing Co (TSMC,
But investors are worried that companies may show weaker second-half earnings, in line with their international competitors, analysts said.
"At this point, most investors will choose to stay on the sidelines before the release of the biannual financial reports for the second half of the year," said Kevin Chung (
Amid concerns over sharp price cuts for flat screen displays in the second half of the year, AU ended a record-high sales streak of 11 consecutive months, posting sales of NT$15.87 billion last month, down 4.7 percent from NT$16.66 billion in May.
AU is scheduled to release its first-half profits on July 22. Semiconductor bellwether TSMC is set to give its outlook for the third quarter on July 29.
In the US, chip giant Intel Corp is scheduled to release its second quarter earnings on Wednesday. But Lehman Brothers analyst Tim Luke trimmed his forecast for Intel's third-quarter profits to US$0.30 a share from US$0.31 last week citing subdued demand for personal computers.
"On the local equity market, the volume will be low for a while, before uncertainties are cleared up," Chung said. "Plus, foreign investors were inactive during the summer vacation, which is part of the reason behind the subdued trading," he added.
He forecasts the volume for the upcoming week will edge up to around NT$300 billion. The benchmark TAIEX is likely to seesaw at a narrow range between 5,400 points and 5,900 in the near term, Chung said.
In the past week, the TAIEX climbed by 2.08 percent, after adding 1.33 percent to close at 5659.78 points on Friday. The trading volume was low, totaling about NT$245 billion.
Chung suggested investors retreat from the tech sector to commodity stocks, with stable profitability and a greater presence in the growing Chinese market, such as Formosa Plastics Corp (
Bill Lan (
Lan is still betting on tech firms, expecting a significant growth in corporate hardware spending will emerge in the final quarter, which will bolster tepid demand for computers and related electronics.
"Tech shares, including flat-screen makers, chip packagers and testers, as well as chip foundries will regain some power this week. Tech stocks will still be the most active on the stock market," Lan said.
He expects the tech sector will bounce back this week, as investors gradually digest about a rash of bearish news about Intel and Amkor Technology Inc.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure