The TAIEX tumbled 2.88 percent, or 219.20 points, to close at 7,391.37 yesterday, the first trading day after the Mid-Autumn Festival, as rising uncertainties over the debt crisis in Greece drove investors to dump shares, verifying Barclays Capital PLC’s cautious view on the nation’s equity market in the short term.
Turnover expanded to NT$91.1 billion (US$3.09 billion) from NT$89.84 billion on Friday, according to Taiwan Stock Exchange (TWSE) data.
Foreign investors sold a net total of NT$14.98 billion in local stocks, dragging down the New Taiwan dollar, which fell NT$0.266, or 0.9 percent, to close at NT$29.487 against the US dollar yesterday, the central bank’s data showed.
Photo: AFP
“The [recent] stock market crisis is driven by fear that this is the global financial crisis all over again, and it is clear that there is risk from the eurozone’s debt crisis, especially in Greece,” Kent Chan (陳衛斌), head of Taiwan equity research at Barclays Capital, told a media briefing yesterday.
Uncertainties over Taiwan’s presidential election in January next year would also be another risk for Taiwan’s stock market in a short term, Chan added.
Although the news pointed to a short-term negative outlook, Chan said it was a good time for investors to buy shares in the local bourse, instead of being panic sellers.
“Personally, I do not think that another global financial tsunami will happen,” Chan said, saying he believed the European central bank would help solve Greece’s debt crisis.
Barclays Capital kept a relatively optimistic view on Taiwan’s structural outlook for next year, forecasting the economy to grow 4.5 percent for the full year, an indication that more capital would be invested in the stock market with better return, he added.
Despite the brokerage house’s cautious view on both the semiconductor and technology hardware sectors, Chan suggested investors buy technology stocks, because compared with non--technology sectors, such as retail and food stocks, the prices of technology stocks have fallen to relatively cheap levels.
Barclays Capital hardware and components research head Kirk Yang (楊應超) expects smartphone and tablet PC-related stocks, especially in Apple Inc’s supply chain, to outperform the sector amid strong sales of the iPad 2 and upcoming demand for the iPhone 5.
In addition, global PC firms — such as Hewlett-Packard Co (HP) — gradually transferred their core business to cloud computing services from PC brand business, raising the upside opportunities for local PC brand stocks by expanding their market share, Yang said.
On the semiconductor industry, Barclays Capital regional semiconductor research head Andrew Lu (陸行之) recommended investing in the stocks of integrated circuits designers, given their high involvement in the smartphone business in emerging markets, which will have the highest growth momentum next year.
Compared with fabless design houses, Lu kept a more cautious view on foundry and back-end stocks, forecasting that their 5 to 10 percent unit growth next year would be offset by falling average selling prices and exchange losses.
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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