Equity strategists yesterday said they remained bullish about the local stock market and forecast that the benchmark index could hit the 10,000 mark in the fourth quarter ahead of the presidential and legislative elections on Jan. 14.
The TAIEX edged up 1.27 points, or 0.01 percent, to close at 8,947.35 yesterday, on turnover of NT$114.7 billion (US$4 billion).
Eric Li (李俊毅), a fund manager at Allianz Global Investors Taiwan Ltd (德盛安聯投信), forecast that the TAIEX would touch bottom in the second quarter, before slowly picking up pace in the third quarter and hitting the 10,000 mark in the fourth quarter.
“Stronger seasonal demand will lead electronics shares higher in the third quarter, before a pre-election rally drives up the TAIEX to a peak in the fourth quarter,” Li told a media briefing.
Li said the death of Osama bin Laden did not lead to a US stock market rally on Tuesday, which could be an indication that global investors might return to focus on fundamentals in the following quarters.
Michael Ding (丁予嘉), chairman and chief executive of Taipei-based brokerage Waterland Securities Co (國票證券), was more optimistic, saying the TAIEX would start to rise in the second quarter, with a rally likely taking place next month.
Based on historical data, the market usually surges after May 20, the inauguration date for the president, Ding said.
Although the New Taiwan dollar’s recent appreciation threatens to erode electronics exporters’ profits, Ding said he remained optimistic about the sector.
He said electronics firms have been well-prepared to deal with forex volatility since last year.
Ding added that he expected the touch panel sector to lead the local bourse in the second quarter amid strong demand for smartphones, while LED stocks could rebound from their recent lows after performing poorly in the first quarter.