Capital Investment Management Corp (群益投顧) analysts yesterday said that the nation’s economy is expected to grow 2.1 percent on the back of an expected rebound in exports next year.
The company forecast the TAIEX would peak at 9,250 points.
Overall, the TAIEX is expected to perform better in the second half of next year as the global economy begins to stabilize, Capital Investment Management analyst Tony Wu (吳東陽) said.
With the exception of a slight decline in China, a consensus of analysts polled by Bloomberg indicates that Japan, Europe and the US are to see mild economic growth, leading to 1.4 percent growth in exports for Taiwan next year, compared with this year’s anticipated 0.2 percent contraction.
The TAIEX’s 9,250-point peak forecasted for next year was derived from retreating medium-term moving averages, Wu said, adding that the TAIEX began its 2,000-point tumble on July 8 from 9,250 points.
“Investors are likely to adopt a more tentative stance in light of concerns over the presidential race and a possible change of ruling party in the first quarter of next year, with the situation expected to continue in the second quarter as companies become conservative when issuing guidance,” Capital Investment Management chairman Andrew Tsai (蔡明彥) said, adding that volatility is unlikely to be as severe as this year.
However, Tsai said that Taiwanese shares might be further marginalized if the nation’s weightings in three indices managed by MSCI Inc are further reduced in May next year, replaced by China’s A-shares or South Korean shares.
“Compared with South Korea, Taiwan’s market is still quite limited in terms of liquidity and securities lending in the eyes of global institutional investors. There is still a ways to go before Taiwan is classified as a developed market,” Tsai said.
Looking ahead, Capital Investment Management analyst David Lai (賴季宏) was upbeat on automotive shares, as stringent emissions regulations are propelling the development of advanced technologies such as lighter vehicles and electric cars; the biotechnology sector, as new drugs are approved; and financial sector shares, as companies expand their hold on overseas markets.
Next year’s Olympic Games in Rio de Janeiro are expected to further boost growth for sports apparel markets, Lai said, adding that the lifting of the one-child policy in China is expected to be a major demand driver.
In the technology sector, Capital Investment Management analyst Jerry Bau (包希豪) said that bellwether Taiwanese suppliers, such as those in the semiconductor and camera lens segments, will be able to stave off the rise of China’s “red supply chain” due to their technological lead.
In addition, the Internet of Things market is to become more defined next year, as businesses begin building the infrastructure and standards for the arrival of smart homes and networks powering driverless cars, Bau added.
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