Mutual funds that invest in the local bourse are expected to post gains in the first quarter of this year on hopes that shares on the Taiwan Stock Exchange will rise on the back of a recovery in the global economy, JPMorgan Asset Management (摩根富林明投信) said yesterday.
In addition, ample liquidity is expected to support share prices as employers give year-end bonuses to their employees ahead of the Lunar New Year holiday, which will fall this year between Feb. 9 and Feb. 17, the fund management firm said.
JPMorgan Asset Management cited records showing that first-quarter increases recorded by mutual funds targeting the local bourse have averaged 8 percent in the past.
Among the gaining mutual funds, a number of funds investing in small and mid-cap stocks in the local bourse posted gains of 11 percent on average in the past due to high liquidity, it said.
Last year, the benchmark TAIEX rose 627.42 points, or 8.87 percent, to close at 7,699.50 points and finished in the middle of the pack among East Asian markets.
After the four-day New Year holiday, the local bourse is scheduled to reopen today.
JPMorgan Asset Management fund manager James Yeh (葉鴻儒) said recent economic data in the US and China show signs of improvement, adding that Taiwan’s economy is expected to stage a rebound under the favorable global environment.
The government has raised its economic growth forecast to 3.15 percent this year from an earlier estimate of 3.09 percent, compared with an estimate of 1.13 percent for last year.
Yeh said the local economy showed signs of a recovery in the fourth quarter of last year and is expected to improve quarter by quarter this year. As the stock market is a leading indicator of the economy, share prices are expected to rise in the first quarter of this year on the positive mood about economic data before economic numbers are released, he said.
Chinese buyers of local electronics devices are expected to restock their inventories ahead of the Lunar New Year holiday to boost Taiwanese high-tech firm sales, which may further stir up investors’ interest in buying shares of these exporters, he added.