Yuanta Securities Investment Consulting Co (元大投顧) yesterday forecast that the TAIEX would be capped at 9,500 points in the next six to 12 months, as local companies can expect to see their net profits decelerate next year.
The investment consultant expects about 230 companies to post an annual 7 percent growth in net profits next year, down from this year’s 32 percent because of a high base level for comparison, Yuanta Securities president Vincent Chen (陳豊丰) told a news conference.
Electronics firms would see net profit grow next year by about 10 percent year-on-year, while companies in traditional industries would register a slower growth 6 percent to 7 percent next year, Chen said.
Financial service providers next year are expected to see their net profits decline by about 5 percent annually, down from their highs this year, Chen added.
The consultancy trimmed its TAIEX forecast slightly on concerns that the 2016 presidential election might affect government policies in favor of cross-strait relations.
“The performance of TAIEX next year would be similar with this year and we advise investors to focus on specific industries or companies,” Chen said. “The growth momentum for technology firms is still greater when compared with other companies, especially upstream technology firms.”
George Chang (張家麒), who tracks the electronics industry for Yuanta Securities, said that domestic semiconductor firms would benefit from product launches related to the “Internet of Things” and rising demand for automobile electronics.
Chang said that even if Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, obtains just half of the orders for “A9” digital device chips from Apple Inc, the chipmaker is still likely to post at least 15 to 20 percent yearly revenue growth next year.
Commenting on the declining price of oil, Yuanta Securities expects crude oil prices to hover between US$50 to U$60 per barrel over the next six months.
Low oil prices would help boost the nation’s GDP by about 0.05 to 0.1 percent, as crude imports account for 8 to 9 percent of the nation’s net imports, Yuanta Securities said.
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