Wed, Feb 09, 2011 - Page 12 News List

TAIEX could hit 10,000: TWSE chief

By Jason Tan  /  Staff reporter

The main Taiwanese bourse has a good chance to hit 10,000 points later this year on the back of the nation’s strong GDP growth, the head of Taiwan Stock Exchange Corp (TWSE) said yesterday.

With last year’s GDP growth surpassing 10 percent, and at least 5 percent growth predicted for this year, the TAIEX is set to benefit from the strong economic sentiment, chairman Schive Chi (薛琦) told reporters.

The price-to-earnings (P/E) ratio of the exchange was 60 when the TAIEX hit its previous high of 12,000 points.

As the current P/E ratio is only 20 now, that translates into room for growth, he said.

The TAIEX closed 0.4 percent lower at 9,111.46 points yesterday. On Jan. 28 — the final day of trading before the Lunar New Year holiday — the TAIEX closed at 9,145.35, its highest closing since May 2008.

Chi also said that the “net rise” of newly listed firms — the -number derived after the deduction of de-listed firms — looks set to mark a 10-year high this year.

This is because brokerage firms have estimated that 47 Taiwanese enterprises are set to launch initial public offerings (IPOs), and another estimated 15 to 20 foreign firms — including those listed in Japan, Australia and the US — have plans to launch IPOs, Chi said.

These combined IPOs could surpass the goal set by Financial Supervisory Commission of having 50 IPOs, he added.

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