Bank of America Merrill Lynch yesterday maintained its positive outlook on the local stock market for the next month, adding that investors should be tactically overweight in the high-tech sector to take advantage of this upturn.
The investment bank’s research team said the TAIEX would likely reach a peak of 8,600 points in the near future — possibly as early as this month or next month, or in the fourth quarter — amid growing optimism, Tony Tseng (曾省吾), head of Taiwan Research at Merrill Lynch Securities, told reporters yesterday.
The target is based on the TAIEX’s five-year price-to-earnings ratio average of 19.4 times and price-to-book ratio of 2.1 times, Tseng said.
The index fell 1.46 percent to 7634.92 yesterday, matching a decline in global shares. Market turnover was NT$74.98 billion (US$2.36 billion). Foreign investors and Chinese qualified domestic institutional investors were net sellers of NT$4.13 billion.
The forecast was also based on new positive signs, including an improving technology sector, which accounted for half of the market’s value, the imminent signing of an economic cooperation framework agreement (ECFA) between Taiwan and China, as well as stable monetary policy, Tseng said in a report dated Thursday.
Tseng said investors should be overweight in tech shares, as stock prices are expected to recover amid easing labor and component shortages and improving gross margins.
Top picks of tech stocks included Mediatek Inc (聯發科), the nation’s biggest handset chip designer, electronics manufacturing service provider Hon Hai Precision Industrial Co Ltd (鴻海精密), power supply provider Delta Electronics Inc (台達電), camera module maker Largan Precision Co Ltd (大立光), Kinsus Interconnect Technology Corp (景碩科技) and Synnex Technology International Corp (聯強).
Merrill Lynch, in collaboration with Taiwan Stock Exchange Corp, is hosting a two-day “Taiwan, Technology and Beyond” conference in Taipei beginning today. More than 110 corporations and about 400 institutional investors and fund managers from around the world are expected to attend the conference.
ADDITIONAL REPORTING BY CNA
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],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts