Taiwan’s listed firms could generate an average of 8.6 percent profit this year, led by manufacturers in the semiconductor industry, Apple Inc’s supply chain and undervalued non-tech firms, Schroder Investment Management Taiwan forecast yesterday.
The profit estimate equals NT$1.53 trillion (US$50.74 billion), compared with NT$1.41 trillion last year, and help lift the TAIEX to 9,000 in the third quarter, Schroder Taiwan vice president Tony Chen (陳同力) said.
The TAIEX closed 0.54 percent lower at 8,500.01 yesterday.
Global investors are trimming bond holdings in favor of equities, in line with expectations of higher returns, Schroder Taiwan chief investment officer Jordan Chen (陳朝燈) said.
They have also increased stocks in developed nations where GDP growth is gaining momentum this year against a slower growth in emerging markets, he added.
As for the local bourse, the TAIEX could hold stable amid the capital movements in anticipation of the winding down of the US quantitative easing (QE), given its fair valuation and earnings outlook, he added.
Trading volume on the local stock market grew to NT$94.15 billion yesterday, the first day after the introduction of day trading for shares in 200 large-cap companies, from the NT$93.48 billion in the previous session on Friday last week.
Shroders expects the deregulation may extend to more stocks later this year to help invigorate the capital market and allow local securities houses more investment flexibility.