Capital Securities Corp (群益金鼎證券) has an upbeat outlook regarding local shares next year, and expects the TAIEX to hit 13,000 points on the back of an improving economy, repatriated funds and the launch of a new continuous trading system.
The TAIEX has slid slightly after it closed at 11,656.4 points on Nov. 19 — the highest closing level in the past 29 years.
The index ended 0.12 percent higher at 11,502,83 points yesterday on turnover of NT$113.270 billion (US$3.71 billion), Taiwan Stock Exchange data showed.
The TAIEX is forecast to perform better next year, likely hovering between 10,000 and 12,100 points for most of the year, Capital Securities president Alex Chia (賈中道) told reporters at a media briefing in Taipei yesterday.
The momentum would be supported by more funds from foreign institutional investors, repatriated capital from local businesses and individuals, as well as investments by insurance companies, Chia said.
As the stock exchange plans to launch a new continuous trading system in March next year, which would generate price quotations at any given time, some foreign institutional investors who have concentrated on high-frequency trading in the nation’s futures market are likely to become more interested in investing in the spot equity market, Chia said.
“From their perspective, the exchange currently matching the quotations once every five seconds is too slow to let them use their trading skills or algorithms, but they are likely to change their minds next year,” Chia said.
Meanwhile, as more individuals and companies are expected to repatriate their funds under the government’s investment program, more money is likely to be put into the stock market, Chia said, adding that they are allowed to invest 25 percent of repatriated funds in financial ventures and keep 5 percent at their own disposal.
About 60 Taiwanese companies with operations in Hong Kong told him at a conference in the territory in late October that they were interested in returning money to Taiwan, as it might be safer and better for family wealth planning, he said.
Besides, with some companies distributing cash dividends on a quarterly basis, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), foreign investors are more willing to park their funds in the local stock market, Capital Investment Management Corp (群益證投顧) vice president Alan Tseng (曾炎裕) said.
While investors are eager to know if the TAIEX is likely to surpass 12,682 points, the all-time high recorded in 1990, it would mainly depend on the performance of the US stock market as the local stock market is highly sensitive to its movenemts, Tseng said.
Given that US President Donald Trump is likely to use policies to support the US stock market before the presidential election next year, the TAIEX might have a change of hitting 13,000 points, Tseng said.
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