Despite volatility in the global markets, particularly on Wall Street, Taiwan’s equity market is expected to be resilient, due to sound economic fundamentals, market analysts said on Saturday.
It is inevitable that the local equity market will be choppy in the short term amid worries over a global trade war, but in the long term, it is expected to return to an upward trend due to an economic recovery, Allianz Global Investors Taiwan Technology Fund manager Peter Liao (廖哲宏) said.
The TAIEX last week fell 204.37 points, or 1.85 percent, to close at 10,823.33 on Friday, when the index fell 182.51 points, or 1.66 percent.
US President Donald Trump on Thursday signed an order imposing tariffs on US$60 billion worth of Chinese imports. China hit back with tariffs of its own on 128 US products, valued at US$3 billion.
The market capitalization of the local main board fell NT$607.50 billion (US$20.83 billion), or 1.84 percent, from a week earlier to NT$32.46 trillion, with foreign institutional investors selling a net NT$1.29 billion worth of shares over the week, according to the Taiwan Stock Exchange (TWSE).
However, Taipei’s losses on Friday were not as steep as Japan’s 4.51 percent slump, Shanghai’s 3.39 percent dive, Seoul’s 3.18 percent drop and Hong Kong’s 2.45 percent decline, indicating that the Taiwanese market is resilient compared with its regional counterparts.
Taiwanese firms are expected to see their profitability improve this year as the economy has been on the way to recovery, while a gradual increase in key interest rates by the US Federal Reserve is expected to reduce the effects on the global economy from a rate hike cycle, Liao said.
The Directorate-General of Budget, Accounting and Statistics last month raised its forecast for Taiwan’s GDP growth this year to 2.42 percent, from its previous estimate of from 2.29 percent, due to solid global demand.
After Friday’s losses, the local main board is expected to enter into consolidation mode in the short term to digest the rising pressure caused by global volatility, Liao said.
Liao prefers stocks related to emerging technologies, such as artificial intelligence, 5G, electric vehicles and the Internet of Things, he said.
Jih Sun Optimization Fund manager Yang Yuan-han (楊遠瀚) agreed, saying that uncertainty posed by a possible trade war between the US and China could place more downward pressure on equities worldwide.
However, Washington gave 60 days to China to negotiate on the impassive tariffs, so there is a chance for both sides to avoid a trade war, Yang said.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS