Taiwan’s benchmark stock index could rise 15 percent by the end of next year on enhanced prospects for technology manufacturers and banks and closer ties with China, Morgan Stanley said.
The TAIEX could climb to 8,500 next year as technology earnings, better interest margins at banks and possible cross-strait mergers and acquisitions boost growth, Morgan Stanley analysts Jesse Wang and Angel Lin said in a report dated Friday. The brokerage previously forecast 7,700 for the gauge by the end of this year.
“Cross-straits [sic] politics will continue to be an ongoing theme that could provide investors with surprises,” the analysts said.
The TAIEX surged the most in eight years on April 30 as the country allowed Chinese investment for the first time since 1949. President Ma Ying-jeou (馬英九) has sought closer ties with China since taking office last year, helping the stock gauge to add 62 percent in the first nine months of this year, double the MSCI Asia Pacific Index’s 27 percent gain. The TAIEX had dropped to a five-year low in late November last year.
Taiwan, which is in recession, is seeking an economic cooperation framework agreement (ECFA) with China to allow cross-shareholdings of banks and insurers that is estimated to create 273,000 jobs and boost exports, figures that have been questioned by certain sectors of the economy and the opposition Democratic Progressive Party.
Morgan Stanley said it was optimistic about personal and notebook computer companies because their profits could rise on corporate replacement demand once Microsoft Corp releases its new Windows 7 operating system. It also recommends handset component makers such as chipset and lens makers because of increasing volume growth.
The brokerage increased its stock weightings on Acer Inc (宏碁), the world’s third-largest personal computer vendor, and MediaTek Inc (聯發科), Taiwan’s biggest chip designer, rating both companies “overweight.”
Morgan Stanley favors private banks, saying they may have strategic flexibility in the Chinese market once a financial memorandum of understanding is signed. Cathay Financial Holding Co (國泰金控), is rated “overweight” and may outperform as its life insurance unit, the largest in Taiwan, may boost earnings per share.
Morgan Stanley added Taiwan Glass Industrial Corp (台玻) to its model portfolio, rating the shares “overweight.” The Commercial Times said on Sept. 17 that Taiwan Glass would spend US$485 million on a factory in China and the Economic Daily News said on Sept. 23 the company would invest NT$20 billion (US$620 million) in energy-saving glass production.
“The firm is China’s second-largest energy-saving glassmaker and well positioned to benefit from robust growth,” the analysts said. “This is because China has vowed to cut greenhouse gas emissions by a notable margin by 2020 from the 2005 level.”
Morgan Stanley recommends China-related consumer shares such as Cheng Shin Rubber Industry Co (正新橡膠), a Taiwanese tire manufacturer, and Giant Manufacturing Co (巨大機械), the world’s largest branded bicycle maker, rating them “overweight” because of accelerating consumption among increasingly wealthy Chinese.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained