The TAIEX is expected to challenge 10,000 points again this year after the heavy losses it incurred late last year, Prudential Financial Securities Investment Trust Enterprise Co (保德信投信) fund manager Bevan Yeh (葉獻文) said yesterday.
Taiwan’s stock market is to be open for trading today after the New Year holiday. The TAIEX last year closed down 915 points, or 8.6 percent, at 9,727.41.
The downturn in the fourth quarter of last year has created buying opportunities, and bargain hunting could emerge this year to push up the benchmark, Yeh said.
The rebound is expected to help the TAIEX challenge 10,000 points again, he said in a statement.
After the losses in the fourth quarter, the price-to-earnings ratio on the Taiwan Stock Exchange is 12.7, lower than the average of 14.2 over the previous five years, reflecting potentially low valuations that could attract bargain hunters, Yeh said.
The market’s high average dividend yield should also lend support to the TAIEX and lead the index higher after the consolidation, he said.
The market’s average dividend yield is at about 4.6 percent, higher than in other regional markets, and reflects the sound finances of companies listed in Taiwan, he added.
Looking at his top picks for this year, Yeh said that he would choose high-tech stocks related to 5G, automotive electronics, artificial intelligence and the Internet of Things.
He added that he would also pay close attention to suppliers of non-tech consumer goods, such as bicycles and sports shoes.
Chen Ssu-ming (陳思銘), manager of First Securities Investment Trust Co’s (第一金投信) Small Cap fund, said in a research note that in addition to 5G applications, he is focused on companies that produce silicon wafers because of tight supply.
He also recommended suppliers of electronics components, such as communications ICs, power management devices, sensors, smartphone camera lenses and flexible printed circuit boards.
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