The historic meeting on Saturday between President Ma Ying-jeou (馬英九) and Chinese President Xi Jinping (習近平) in Singapore is expected to have a limited impact on the TAIEX this week due to a lack of economic and trade accomplishments, analysts said.
After seeing signs of a sell-off in local shares late last week, the market is expected to focus on economic news and the outlook for the technology sector in the run-up to the year-end holiday season, they said.
“The Ma-Xi meeting is more symbolic than substantial,” said Roy Chun Lee (李淳), deputy director of the Chung Hua Institution for Economic Research’s (CIER, 中華經濟研究院) Taiwan WTO Center.
Photo: AP
Lee said the leaders’ meeting did not create any “exciting topics” for the market.
“Even if investors greeted the meeting with a positive attitude, the impact on the market would be short-lived... Investors this week are expected to refocus on the nation’s economic fundamentals, such as corporate earnings and industry outlook,” he said.
Masterlink Securities Investment Advisory Corp (元富投顧) president Liu Kun-hsi (劉坤錫) said he was positive about the latest reconciliation across the Taiwan Strait, but lamented the lack of any solid progress on trade and economic issues from the meeting.
“Ma and Xi might have paved a way for future presidents of Taiwan and China to hold meetings on a regular basis, but the meeting this time has no economic breakthroughs,” Liu said by telephone.
“Investors are likely to focus more on the fundamental issues than the meeting itself,” he said.
In addition to monitoring the releases of earnings results from listed companies, investors this week are also expected to have their eyes set on how lawmakers deliberate on a draft bill of a capital gains tax on securities investments and if the nation’s exports remain in a slump in the final quarter of the year.
Taiwan’s exports shrank by double-digit percentage points for the fourth consecutive month in September, with accumulated exports dropping 9.4 percent year-on-year in the first nine months of the year amid lingering weak global demand, according to government statistics.
The Ministry of Finance is scheduled to release the results of last month’s foreign trade data today, which might show another double-digit fall in exports, local media reported yesterday, citing Minister of Finance Chang Sheng-ford (張盛和).
Chang on Saturday said that amid a sluggish global economy, the typical peak season effects of the fourth quarter have yet to appear and Taiwan’s exports last month would likely fall again.
However, the fall is expected to be lower than September’s 14.6 percent dip, media reports said.
Chang expects exports to improve from next month when buyers in the US and Europe stock up on goods ahead of Christmas.
Financial Supervisory Committee Chairman William Tseng (曾銘宗) on Saturday said the Ma-Xi meeting was an important milestone for the development of the cross-strait relationship, and it would benefit financial and economic interactions between the two sides.
“The stock market would see a premium on peace across the Taiwan Strait in the mid and long-term following the meeting,” Tseng was quoted as saying by the Chinese-language Apple Daily.
However, the market might have already priced in the meeting on Wednesday, when the TAIEX gained 1.65 percent on the back of a net purchase of NT$21.73 billion (US$663.92 million) in Taiwanese shares by foreign institutional investors, Hua Nan Securities Management Investment Co (華南投顧) chairman David Chu (儲祥生) said.
“I do not think the Ma-Xi meeting will be a catalyst for local bourse this week,” Chu said by telephone.
Rather, it is worth noting that the selling pressure — which emerged on Friday — might continue today given that there is no exciting catalyst in sight, Chu said.
Institutional investors sold a net NT$17.12 billion of Taiwanese shares on Friday, including a net sale of NT$14.66 billion by foreign institutional investors, Taiwan Stock Exchange data showed.
The TAIEX fell 1.77 percent on Friday, but rose 1.63 percent last week from the previous week.
Additional reporting by CNA
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by