Stock market yield likely to fall next year: Credit Suisse

By Kevin Chen  /  Staff reporter

Wed, Nov 28, 2012 - Page 14

Taiwan’s stock market has a relatively high dividend yield compared with regional markets, but the dividend yield for the TAIEX is likely to fall next year due to depressed earnings from cyclical sectors such as steel and petrochemicals, Credit Suisse said yesterday.

In its latest Taiwan Market Strategy report, Credit Suisse strategist Jeremy Chen (陳建名) said the listed companies on the Taiwan Stock Exchange are expected to report an average dividend yield of 3.1 percent next year, down from the 4.2 percent estimated for this year.

However, Credit Suisse said this still compares favorably to the 1.18 percent yield on 10-year Treasury bonds, as more technology companies put emphasis on cash flow and therefore increase dividend payouts.

Quanta Computer Inc (廣達), the world’s top contract laptop maker, heads the brokerage’s top 10 list of large-cap stocks that offer the highest dividend yield with 5.8 percent forecast for next year, followed by PC vendor Asustek Computer Inc’s (華碩) 5.1 percent and Far EasTone Telecommunications Co’s (遠傳電信) 4.9 percent.

The best large-cap list does not include any of the four major units under the Formosa Plastics Group (台塑集團) as their earnings are expected to drop to their lowest level in more than a decade this year, Credit Suisse said.

In the small-cap stocks list, cellphone keypad maker Silitech Technology Corp (閎暉) leads the best 10 shares with its dividend yield forecast at 8 percent, followed by Huaku Development Co’s (華固建設) 7.5 percent.