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Outlook good for local stocks: market watchers

Market watchers yesterday painted a rosy outlook for the local bourse, expecting the recent strong momentum to continue throughout the first quarter of next year, despite of recent political disputes amid campaigning for tomorrow's local government elections.

"The local bourse will return to fundamentals after the election is over," Yu Huei-ling (于蕙玲), vice president of Jih Sun Securities Investment Trust Co (日盛證券投信), told the Taipei Times on the sidelines of an investment briefing yesterday.

Fundamentals appear sound and healthy, in light of vigorous Thanksgiving holiday sales that could be a precursor of the traditional Christmas high season, with local electronics companies set to be one of the biggest beneficiaries, Yu said.

The government's plan to convene a second Economic Development Advisory Conference next month to discuss a possible relaxation on cross-strait investment restrictions could also boost the local market, the analyst said.

Fubon Asset Management Co (富邦投信) was similarly upbeat on the market's outlook.

The company expects the rise in stocks to last until the first quarter of next year with foreign capital flooding in, driven by a likely end to US interest rate increases, the seeming stabilization of oil prices and growing profitability among Taiwanese electronics companies, the firm said in a statement released yesterday.

The TAIEX yesterday declined 0.38 percent to close at 6,179.82 on turnover of NT$80.47 billion (US$2.4 billion).

Overseas investors bought a net NT$1.59 billion of stocks yesterday.

Looking ahead, Jih Sun expects the benchmark index to fluctuate between 5,260 and 6,580 points next year, Yu said.

Potential negative factors that could influence the bourse include avian flu, the future trend of oil prices and the property bubble in the US, she said.
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