IBTS Investment Consulting Co (IBTSIC, 台灣工銀投顧) yesterday said Taiwan’s stock market would show improved performance next year, supported by large-cap technology companies, as global economic conditions turn positive.
The stock market would also gain support from ample liquidity as governments around the world have introduced quantitative easing monetary policies to ease problems in their home markets, Kenner Wang (王為敏), chairman and president of IBTSIC, said at a conference.
“Although the European debt crisis and the US’ ‘fiscal cliff’ remain unresolved, we forecast Taiwan’s stock market will bounce back to the 8,000 mark next year with a base interest rate of 2 percent,” Wang said.
“Due to low base this year, shares of large-cap tech companies will remain the best investment choice with average growth in net profits of 19.63 percent,” he said.
Albert Chen (陳振鈞), executive vice president of IBTSIC’s research department, said stocks that are related to products running Microsoft Corp’s Windows 8 operating system would be the key to gaining high returns next year, given that mobile devices running the new operating systems have growth potential.
Firms developing cloud-computing technologies or manufacturing storage chips, semiconductors and panels are also good investment targets next year, Chen said, adding that Intel’s X86 servers and 22-nanometer tri-gate technologies would revolutionize the technology industry, leading firms to upgrade products to meet demand for more efficient and cheaper products.
As the penetration rate of mobile devices increases, price and product features will be niches for companies to achieve high growth, Chen said, adding that low cost, enhanced cloud-computing technologies for unstructured data, such as photographs or notes stored on mobile gadgets, high-resolution retina displays and high-end lenses for camera modules on mobile devices would all be key elements for technology firms to increase market share, while also driving up the sales of manufacturing companies.
Meanwhile, Peter Tzeng (曾耀德), senior vice president of IBTSIC’s research department, suggested investors pay attention to Taiwanese cement, tire, bicycle, retail and construction firms, as demand for such products will continue to grow in China amid supportive policies implemented by the Chinese government.
Jean Lo (羅敏菁), assistant vice president of IBTSIC’s equity investment department, forecast that growth in the bio-medical industry would become another highlight for investors next year, as the issue of an aging population would drive strong demand for new medicines.
Overall, IBTSIC said it projects Taiwan’s economy will expand 2.67 percent next year as exports grow by 4 percent to US$310 billion from this year’s estimated figure of US$295 billion.
China’s economy is likely to expand 8.2 percent next year, emerging markets by an average 5.6 percent, the US by 2.1 percent and 0.2 percent in the eurozone, it said.
At a separate investment conference, Cathay Securities Investment Trust Co (Cathay SITC, 國泰投信) said the local stock market could trade above 8,500 points next year, despite the implementation of a new capital gains tax on profits from securities transactions.
Under the new tax, individual investors can choose between reporting gains as part of their income or paying a stock transaction tax of between 0.02 percent and 0.06 percent when the benchmark weighted index rises to 8,500 points or higher.