Any political turmoil that may arise in the wake of the indictment of first lady Wu Shu-jen (
"We are not that bearish [about the market]," Jason Huang (
The escalating political struggle is likely to weigh down the stock market, but not much, as investors have mostly factored in the uncertainty during the investigations into the first family's alleged misuse of state funds over the past few months, Huang said.
The downside could be as little as a one-day loss on the TAIEX, while the benchmark index is expected to see strong support at 6,900 points to 7,000 points, he said.
Last Friday, the TAIEX rose 83.51 points, or 1.2 percent, to a five-month high of 7161.61 before the indictment was announced to the public in the afternoon.
Foreign investors bought a net of NT$5.95 billion (US$180 million) last Friday, bringing their net share purchases to NT$10.23 billion in the first three days of this month, according to Taiwan Stock Exchange data.
"We do not expect a turnaround of foreign investors' investment strategy in the Taiwanese market caused by the incident," said Clive Hsueh (薛宗傑), manager of proprietary trading group at IBT Securities Co (台灣工銀證券) at Industrial Bank of Taiwan (台灣工業銀行).
Hsueh cited the Thai bourse that saw only a one-day sell-off from overseas investors after the military coup in September before returning to normal. Taiwan's political situation was much less serious, he said.
Neither analyst anticipated that any new attempt to recall President Chen Shui-bian (
Unless Chen resorted to some irrational or hard-line political tactic -- like declaring a curfew or martial law -- the stock market would remain stable, Hsueh said.
To soothe investors, Shih Jun-ji (
Listed companies in the Taiwan Stock Exchange and GRETAI Securities Market saw growth of 25.94 percent and 107.49 percent in their pre-tax income last quarter over last year ago, the commission said in a statement released yesterday.
Publicly traded firms had an average pre-tax margin of 10.44 percent in the three months to Sept. 30, up from 9.51 percent in the first half and 8.97 percent in the comparable period of last year, the statement read.
"All this indicates healthy industry fundamentals and growing profitability," the commission said.
Analysts retained their views that the TAIEX would peak at a high of 7,400 points in the current quarter.
"The correction would give investors a good opportunity for bottom fishing for decent investment targets," Huang said.
They suggested investors include China-concept stocks in their portfolios, which benefit from the country's fast-growing demand, including Uni-President Enterprises Corp (統一企業), Taiwan's leading producer of processed food, and First Steamship Co (益航), which has a chain of department stores in China.
Vietnam-concept stocks that have invested in the growing economy are good targets as well, including Formosa Plastics Corp (
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to