Mon, Jun 25, 2007 - Page 12 News List

Foreign buyers optimistic over market

BUYING SPREE Rising economic indicators, a strong past week at the bourse and a handful of economic forums are luring international investors to the local market

By Amber Chung  /  STAFF REPORTER

The red-hot TAIEX is expected to hit 9,000 points later this week, driven by continued foreign buying and a series of positive developments in the political arena, analysts said yesterday.

"We are very optimistic about the market outlook," Jason Huang (黃崇恩), assistant manager at UOB Investment Advisor (Taiwan) Ltd, said in a telephone interview yesterday.

The benchmark index is expected to soar to as high as 9,000 in the latter part of this week, when the second quarter ends, after a very short-term fluctuation above 8,700, Huang said.

The Singaporean investment advisory agency anticipated the bull market running through to the Mid-Autumn Festival in September.

The TAIEX is likely to hit the long-awaited 10,000 points more by the end of this year or before the presidential election next March, he said.

feverish rally

The nation's stock market experienced a feverish rally last week, with the TAIEX hitting 8,851.99 on Thursday -- the highest in seven years.

Daily turnover was robust and exceed NT$200 billion (US$6 billion) on Wednesday, the highest amount in over two years.

International investors bought a record daily net of NT$42.93 billion last Wednesday and purchased a total of NT$87.08 billion worth of shares in the four trading days last week.

"We expect the foreign buying spree to continue after seeing robust capital, as overseas investors and Taiwanese funds parked abroad have returned their focus on the laggard Taiwanese market," Huang said.

The research team at Mega International Investment Service (兆豐國際投顧), meanwhile, revised upwards its forecast for the TAIEX to 9,100 from 8,700 by the end of this month, in light of recent rising momentum.

The Mega International investment team said investors should be cautious over buying more shares as they could face increased risks against an increasingly limited upside.

growing interest

A series of investment conferences organized by foreign brokerage houses in Taipei last week and this week may suggest a growing foreign interest in the local equity market.

UBS Securities (Taiwan) is holding a two-day investment forum starting today, which features 92 Taiwanese large-cap company participants, including Taiwan Semiconductor Manufacturing Co (台積電), the world's largest made-to-order chipmaker, Hon Hai Precision Industrial Co (鴻海精密), the world's biggest contracted electronics manufacturer and Cathay Financial Holding Co (國泰金控), the nation's leading financial group.

The event hopes to attract over 200 investors.

This followed a similar event held last week by the Edinburgh, Scotland-based Martin Currie Investment Management Ltd, which plans to raise US$300 million in funds to invest in the nation's medium and small-cap stocks in pursuit of a 150 percent return within the next three years.

The announcement by Ma Ying-jeou (馬英九), the Chinese Nationalist Party's (KMT) candidate for the presidential election, of the experienced economic policy planner Vincent Siew (蕭萬長) as his running mate has been deemed by foreign investors as positive news for the market, as this could signal that further cross-strait relaxation could be expected, Huang said. Siew was premier under president Lee Teng-hui (李登輝).

He also served as minister of economic affairs and chief of the Mainland Affairs Council when the KMT was in power.

"Known for pushing closer economic and trade ties with China, Siew will complement Ma's `mutual non-denial' cross-strait blueprint," Cecilia Liu, of SinoPac Securities Co (永豐金證券), wrote in an investment note dated Saturday.

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