Tue, Sep 20, 2016 - Page 1 News List

TAIEX rises on surprise popularity of iPhone 7

CONSOLIDATION:Sales of Apple’s newest smartphone also boosted currency transactions, but one expert said the market would stabilize until policy announcements

By Crystal Hsu  /  Staff reporter

The TAIEX yesterday staged a strong comeback, rising 2.81 percent, or 250.58 points, to close at 9,152.88, led by local firms in Apple Inc’s supply chain as the iPhone 7 is turning out to be more successful and popular than expected, analysts said.

The rally came despite a correction on Wall Street over the four-day Mid-Autumn Festival holiday and policy uncertainty ahead of meetings of the central banks of the US and Japan.

“The rebound was much stronger than expected because of pre-orders for Apple’s iPhone 7 blowing away expectations at US telecom providers,” Masterlink Securities Investment Advisory Corp (元富投顧) president Liu Kun-hsi (劉坤錫) said by telephone.

Turnover rose to NT$96.98 billion (US$3.08 billion), a 15.14 percent increase from Wednesday last week, the last day before the market closed for the holiday, Taiwan Stock Exchange data showed.

Apple might sell as many as 100 million iPhone 7s by the end of the year, thanks to robust initial sales, which might be benefiting from rival Samsung Electronics Co’s recall of its Galaxy Note 7, foreign technology analysts forecast.

The exciting twists led institutional players to increase positions in local shares by a net NT$11.27 billion, while mutual funds added net holdings of NT$178 million, but proprietary traders trimmed holdings by NT$57.31 million, according to bourse tallies.

Foreign fund inflows elevated the New Taiwan dollar 0.76 percent to close at NT$31.450 against the greenback in Taipei trading, outpacing a 0.06 percent increase in both the Chinese yuan and South Korean won, the central bank said in a statement.

Currency transactions totaled US$1.045 billion on the Taipei Exchange, a significant increase from US$705 million on Wednesday on the back of better iPhone 7 sales, a trader at a local bank said.

Taiwanese firms supply chips, batteries, camera lenses, casings and other components for the iPhone 7, explaining a 4.29 percent rise in electronics firms, while semiconductor players advanced 4.11 percent and computer and peripheral makers rose 3.51 percent, the Taiwan Stock Exchange said.

The TAIEX might consolidate for the rest of the week until the US Federal Reserve and the Bank of Japan announce their latest monetary policies, Liu said.

“Chances are the Fed will keep interest rates unchanged this month and save rate hikes for its meeting in December to better support economic growth,” Liu said, adding that the scenario would drive more foreign funds to emerging markets, including Taiwan.

However, the currency trader voiced caution, saying foreign exchange markets could turn around any time investors see fit.

The local currency might trade between NT$31.2 and NT$31.8 versus the US dollar in the near future, as the central bank will not tolerate excessive volatility, Liu said.

The central bank is due to review its policy rates later this month.

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