The local stock market is expected to stage a short-lived rally next week as some investors maintain interest in buying stocks in financial, or traditional sectors, which are seen as major beneficiaries of the new government's economic stimulus measures.
Long-term investors may still be willing to extend their purchase of local stocks during the post-election period, but they will be cautious as the local bourse will face mounting pressure from global peers, which are under the shadow of the possible effects of the US recession, analysts said.
Backed by a new buying spree, which may not be as strong as last week, "local stock is likely to rise one, or two trading sessions as the outcome of the presidential elections match the market expectation," an official at a local investment company said. He requested anonymity.
PHOTO: CHEN TSE-MING, TAIPEI TIMES
Asset-rich Tatung Co (
The benchmark TAIEX index may slightly expand last week's gain to between 8,600 and 8,700 points, but will be capped by uncertainty about the macroeconomic environment and possible weak corporate earnings results to be released next month, the local investment consultant said. The TAIEX closed 2.25 percent higher at 8,524.99 on Friday.
With limited impact from a slowing economy in the US, "We believe stocks in traditional sectors will still have [upside potential] in the next one or two months," said Sophia Cheng (程淑芬), managing director of equity research at Merrill Lynch's Taiwan branch, at a forum ahead of the presidential election last week.
Merrill Lynch is positive about the nation's traditional sector on the back of the government's renewed efforts to spur domestic demand and thereby the nation's economy by building stronger trade ties with China.
Newly elected president Ma Ying-jeou (馬英九) of the Chinese Nationalist Party (KMT) had told voters before the election that he would scrap the long-term ban on direct flights between Taiwan and China by the summer and would raise the quota for Chinese visitors to Taiwan as well as allow Chinese to invest in the local property market.
Goldman Sachs also said a KMT victory should lead to positive policy change and improved business confidence, a report dated March 7 said.
Following the KMT's win Goldman Sachs rerated Taiwanese shares to a price-to-earning ratio of 15, which translates to a index level of 10,000.
Expressing a similarly bullish view on local stock market in the long run, Merrill Lynch said the new government's policy change may offer a chance for an upgrade from global fund managers, which had under-weighed the local stock market over the past few years.
"We are trying to get a picture about what the Taiwanese stock market will look like at the end of 2009," Cheng said.
Foreign investors resumed large-scale purchase of local shares worth NT$24.25 billion on Friday, reversing their profit-taking sales over the past month, Taiwan Stock Exchange data showed.
Financial stocks including First Financial Holding Co (第一金控) and Chinatrust Financial Holding Co (中信金控) were the favorites among overseas fund managers on Friday.
In contrast to the consensus bullish view on financial sector, Sherry Lin (
"Asian stock markets will have a close link with the US market as used to be the case," Lin said, despite the belief that Asian markets would go their own way due to the rise of China.
A group of Taiwanese-American and Tibetan-American students at Harvard University on Saturday disrupted Chinese Ambassador to the US Xie Feng’s (謝鋒) speech at the school, accusing him of being responsible for numerous human rights violations. Four students — two Taiwanese Americans and two from Tibet — held up banners inside a conference hall where Xie was delivering a speech at the opening ceremony of the Harvard Kennedy School China Conference 2024. In a video clip provided by the Coalition of Students Resisting the CCP (Chinese Communist Party), Taiwanese-American Cosette Wu (吳亭樺) and Tibetan-American Tsering Yangchen are seen holding banners that together read:
UNAWARE: Many people sit for long hours every day and eat unhealthy foods, putting them at greater risk of developing one of the ‘three highs,’ an expert said More than 30 percent of adults aged 40 or older who underwent a government-funded health exam were unaware they had at least one of the “three highs” — high blood pressure, high blood lipids or high blood sugar, the Health Promotion Administration (HPA) said yesterday. Among adults aged 40 or older who said they did not have any of the “three highs” before taking the health exam, more than 30 percent were found to have at least one of them, Adult Preventive Health Examination Service data from 2022 showed. People with long-term medical conditions such as hypertension or diabetes usually do not
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Heat advisories were in effect for nine administrative regions yesterday afternoon as warm southwesterly winds pushed temperatures above 38°C in parts of southern Taiwan, the Central Weather Administration (CWA) said. As of 3:30pm yesterday, Tainan’s Yujing District (玉井) had recorded the day’s highest temperature of 39.7°C, though the measurement will not be included in Taiwan’s official heat records since Yujing is an automatic rather than manually operated weather station, the CWA said. Highs recorded in other areas were 38.7°C in Kaohsiung’s Neimen District (內門), 38.2°C in Chiayi City and 38.1°C in Pingtung’s Sandimen Township (三地門), CWA data showed. The spell of scorching