In the wake of Saturday's elections, fundamentals are now key to the nation's stock market, with high-tech and financial shares the ideal investment picks, foreign investment banks said in their latest reports.
"We have been positive on the TAIEX since end-October, believing that the market will reflect more of the fundamental improvement and be less sensitive to political noise," Sophia Cheng (程淑芬), head of research at Merrill Lynch Taiwan, said in a report released on Monday.
Cheng recommended technology and financial stocks based on the tech sector's strong revenue and profits, and the financial sector's discounted valuation.
Transportation stocks also provide opportunities given expectations that the government may make changes to its cross-strait policy, but a rebound in the shipping sector could be short-lived, given potential intensified price competition, she said.
Recommendations in the high-tech segment included Taiwan Semiconductor Manufacturing Co (TSMC,
The TAIEX yesterday closed up marginally, by 2.21 points or 0.03 percent, at 6,350.52 on turnover of NT$114.2 billion (US$3.41 billion). The benchmark index marked a 16-week high at 6,348.31 on Monday after Saturday's local government elections.
The opposition won the majority of posts in the polls, sparking expectations that the Democratic Progressive Party (DPP) government will adjust its cross-strait policy and seek closer ties with China.
Against this backdrop, ABN AMRO Asset Management Taiwan said yesterday in its latest report that the bull market is expected to continue and boost the TAIEX to exceed this year's peak of 6,481.62 by the year's end.
The company said that the local bourse's relatively small rise of 5 percent this year -- in comparison with the average 20 percent to 30 percent increases in foreign markets -- and a weak NT dollar will drive continued foreign capital inflow.
By the same token, CLSA Ltd yesterday raised the weighting of Taiwan's market in its portfolio by four percentage points to 22 percent, Bloomberg reported, citing Christopher Wood, CLSA's Jakarta-based Asian strategist.
Merrill Lynch expects a further relaxation of China policies next year, as a scheduled Economic Development Advisory Conference will likely emphasize cross-strait issues, which the government will want to adjust in order to boost domestic confidence, Cheng said.
This should offer a short-term boost to market sentiment, but uncertainty over policy execution remains given complicated political considerations, the analyst said.
Jesse Wang (王嘉樞), head of research at BNP Paribas Securities (Taiwan) Co, said that he did not anticipate the DPP making any quick change of stance in its China policy.
To do so could jeopardize the party's identity, especially as it moves to restructure its leadership after the bitter defeat, he added.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS