Print

Mail

wiki links

Global funds revaluating local market

The presidential election may be a good opportunity for foreign investors to revaluate the Taiwanese stock market, especially if the new administration takes faster action in improving cross-strait ties and adopts more economic stimulus measures, Merrill Lynch & Co said yesterday.

Most global fund managers were underweight on the Taiwanese market, but a growing number started putting their money into the local bourse in the fourth quarter of last year -- two quarters ahead of the presidential election on Saturday, said Sophia Cheng (程淑芬), managing director of equity research at Merrill Lynch's Taiwan branch.

"They are very interested in the elections," Cheng said. "Political activities are short-lived, but policy adjustments following the elections will impact on the valuation of a country in the long run. And they are wondering if this year will be the time for changes."

If the new government takes a more open attitude in improving cross-strait ties and more aggressive measures in spurring domestic demand, those investors, who were underweight on the local stock market, would be willing to upgrade the local market's weighting, Cheng said.

That would mean more capital inflow as investors increase their holding of local stocks, she said.

She did not provide a forecast about the expected capital inflow, saying that would depend if there's a change in investor mindset.
This story has been viewed 963 times.