The TAIEX plunged 1,900.42 points, or 21.18 percent, for the whole of this year after the index dropped 2.74 points, or 0.04 percent, to close at 7,072.08 yesterday on the last trading day of the year, Taiwan Stock Exchange (TWSE) data showed.
It was the first time since 2005 that the TAIEX failed to close higher on the last trading day of the year, exchange data show.
However, Vice Premier Sean Chen (陳冲) told reporters that he remained upbeat about the outlook for the local bourse when it opens on Monday.
For the whole year, the rubber sub-index topped all the sectors by rising 10.16 percent to close at 284.39 points yesterday, followed by the sub-indices for automobiles, cement and food, according to TWSE data. They were the only four sectors retaining gains at the year-end.
Fund managers attributed the stock market’s slower-than-expected performance this year to uncertainty resulting from a close race for the presidential election on Jan. 14 and rising downside risks in the global economy in the second half of the year.
“This month’s weak trading momentum indicated the upcoming presidential election has been continuing to affect the stock market, causing more investors to keep a ‘wait-and-see’ attitude,” JPMorgan Asset Management (摩根富林明投信) fund manager James Yeh (葉鴻儒) said in a note yesterday.
Turnover totaled NT$59.33 billion (US$1.96 billion) yesterday, the fourth straight day in which it stood under NT$60 billion, dragging the average daily turnover down to NT$67.8 billion for this month, TWSE data show.
Global uncertainties, including the eurozone debt crisis and the slow US economy, were also factors striking down the local stock market in the second half of the year, which saw the benchmark index tumble 18.27 percent from the end of June.
“These uncertainties brought the TAIEX’s potential pre-election rally to nought,” Allianz Global Investors Taiwan Ltd (德盛安聯投信) fund manager Corrina Xiao (蕭惠中) said.
Although the global economy might remain slow next year, Xiao expects the TAIEX to bottom out in the first quarter of next year, in line with the economy.
Since order visibility remains vague at most listed companies, investors should focus more on stocks of contract manufacturers and component suppliers related to items such as middle to low-priced smartphones and Apple Inc’s iPad, Taishin Securities Investment Trust Co (台新投信) manager Chuang Wen-jen (莊文仁) said in a note.
Meanwhile, ultrabook-related stocks and large-cap industrial conglomerate stocks might climb next year, Chuang added.
The New Taiwan dollar has risen 0.26 percent since the end of last year, and it closed flat at NT$30.29 against the greenback yesterday, according to central bank data.
The local currency surged to NT$28.632 per US dollar, its highest level of the year, against its US counterpart on May 5. However, it gradually dropped in the following months, hitting NT$30 versus the greenback on Sept. 22, central bank data show.
The full-year rise of 0.26 percent this year for the New Taiwan dollar beats the Singapore dollar's 1.22 percent decline and the South Korean won's 1.48 percent drop, but is less than the Chinese yuan's 4.6 percent rise and the Japanese yen's 4.83 percent increase.