The opening of the Shanghai World Expo 2010 is expected to lift Taiwanese retail and food shares with ties to Chinese markets, but a recent sharp rise in those stocks could induce profit-taking pressure in the near term, analysts said on Saturday.
Although the largest-ever World Expo is expected to attract more than 70 million people before it closes on Oct. 31, increasing domestic demand in China has already boosted some of the shares on Taiwan’s stock market, they said.
Wu Wun-tong (吳文同), chief investment officer of Capital Investment Trust Corp (群益投信), said food and retail shares could continue to rise because Chinese domestic markets are expected to grow in the long term.
Wu said, however, that as some of the shares rose substantially before the opening of the expo, they are likely to enter a correction phase in the short term.
Taiwan’s Ruentex Industries Ltd (潤泰) and Ruentex Development Co (潤泰創新國際) — each of which holds more than 10 percent of shares in RT Mart China, a leading foreign hypermarket operator in China — retreated sharply on Friday because of profit-taking.
Shin Kong Investment Trust Co (新光投信) fund manager Lee Jui-heng (李瑞恒) said Taiwanese airlines, travel shares and shares closely connected to Chinese domestic markets would benefit the most from the expo.
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