More than 90 percent of Taiwan-based firms at a two-day event were optimistic about the outlook for the local stock market this year, despite the possible impact of China’s efforts to pull back on easy credit, the Taiwan branch of Credit Suisse Securities said yesterday.
Randy Abrams, director and head of equity research in Taiwan for Credit Suisse, said at the Tuesday closing of a two-day forum in Taipei, that 27 of the 29 Taiwan-based enterprises taking part in the event expressed optimism over the local bourse’s performance for this year.
Citing the conclusion reached at the forum by representatives of the 27 Taiwanese businesses and more than 100 foreign institutional investors, Abrams said low inventory levels and strong demand would push the benchmark TAIEX to continue its rally in the first quarter of the year. This would include asset stocks that posted impressive jumps in value over the past year, he said.
Abrams forecast that the weighted index would surpass 9,000 points this year.
China’s obvious efforts to avoid inflation that could result from a loose monetary policy would only affect Taiwan’s stock market in the short term, fund managers said.
Economic fundamentals, rather than a higher reserve requirement ratio, are what would influence the long-term performance of the stock market, they said.
It is widely speculated that China’s central bank will raise the reserve requirement ratio by 0.5 percentage points every quarter until it reaches 17 percent.
Some local analysts said the move by the Chinese central bank is part of its initial efforts to stabilize the country’s economy and contain likely inflationary pressure brought about by soaring economic growth.
Taiwan’s share prices moved downward yesterday, with the weighted TAIEX dropping 112.81 points, or 1.35 percent, to close at 8,196.56.
The local bourse opened high at 8,229.25 and traded between 8,257.83 and 8,194.81 during the session.
A total of 4.93 billion shares changed hands on heavy market turnover of NT$141.01 billion (US$4.43 billion).
Losers outnumbered gainers 2,244 to 932, with 197 remaining unchanged. Foreign institutional investors were net sellers of NT$2.55 billion in shares.
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NEW PRODUCTS: MediaTek plans to roll out new products this quarter, including a flagship mobile phone chip and a GB10 chip that it is codeveloping with Nvidia Corp MediaTek Inc (聯發科) yesterday projected that revenue this quarter would dip by 7 to 13 percent to between NT$130.1 billion and NT$140 billion (US$4.38 billion and US$4.71 billion), compared with NT$150.37 billion last quarter, which it attributed to subdued front-loading demand and unfavorable foreign exchange rates. The Hsinchu-based chip designer said that the forecast factored in the negative effects of an estimated 6 percent appreciation of the New Taiwan dollar against the greenback. “As some demand has been pulled into the first half of the year and resulted in a different quarterly pattern, we expect the third quarter revenue to decline sequentially,”
RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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