The TAIEX is likely to hover between 13,000 and 15,000 points in the first and second quarters of next year as it enters consolidation mode, before rallying in the third quarter and climbing to 16,800 points in the fourth quarter, Capital Investment Management Corp (群益證投顧) said yesterday.
The TAIEX yesterday closed up 1.06 percent at 14,483.07 points, a record high, Taiwan Stock Exchange data showed.
The index is expected to face correction pressure in the first quarter of next year, which is usually a low season for the local technology sector, Capital Investment chairman Andrew Tsai (蔡明彥) said in a media briefing in Taipei.
Photo: Vanessa Cho, Taipei Times
The correction is expected to last into the second quarter, Tsai said, adding that investors tend to sell stocks with low-yield dividends before May, the beginning of the tax season, so they could pay less tax.
“While investors usually hold stocks with yields of at least 4 percent during the tax season, as the high yields would offset higher tax payments, there would be fewer stocks with high yields next year as most companies would remain cautious,” he said.
The TAIEX is projected to move to a range of 14,000 to 15,500 points in the third quarter, as the local technology sector would benefit from more orders in the peak season, Tsai said.
“Experts have predicted that herd immunity [for COVID-19] would be achieved in the third quarter, which would have a mixed effect on the market. Investors would feel relieved and be more optimistic, but governments might consider ending their quantitative easing programs,” he said.
Another risk the local stock market would face is volatility in the US stock market, which would be affected by US president-elect Joe Biden’s policies, Washington’s tax increases on the rich, tighter regulations on Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc and Alphabet Inc’s Google, and an overheating of the initial public offering market, Tsai said.
If the US stock market does not crash and governments extend their quantitative easing programs, it is possible that the TAIEX would advance to 16,800 points at most in the fourth quarter, he said.
Capital Investment has an upbeat outlook for local biotech companies, due to rising demand for COVID-19 test reagents and vaccines. It is optimistic about the marine shipping sector on the back of robust demand, as well as sports and leisure equipment companies thanks to higher demand for fitness products, it said.
It also has an upbeat outlook for airlines, as border controls are expected to relax next year, and people might opt to travel on regional routes, such as from Taiwan to Southeast Asia, it said.
SUPPLY CHAIN RESHUFFLE: The chipmaker was ‘cautious’ in not making commitments too early in building production in the US, citing ‘geopolitical factors,’ Nikkei Asia said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is considering building an advanced IC packaging plant in the US following a massive investment to set up a wafer fab in Arizona, Nikkei Asia reported. TSMC was considering the plant in response to “Washington’s desire to bring more of the tech supply chain onto home turf,” the report said. TSMC increasingly faces the need to expand in the US, which accounts for about 62 percent of its total sales, Nikkei Asia said, citing three sources who declined to be named. The potential US plant would be equipped with the latest 3D stacking technologies to arrange chips
As much as the US pines for the good old days of global semiconductor supremacy, Japan feels its loss of glory even more. Once a dominant name in electronic components, the nation has been overtaken by Taiwan, South Korea, and, more recently, China. Yet Tokyo might have a viable plan to revitalize its domestic sector. “Unlike the purely domestic, independent way it was done in the past, I think we need to cooperate with overseas counterparts,” Akira Amari, a former economy minister and senior member of the ruling Liberal Democratic Party, told Bloomberg News’ Isabel Reynolds and Emi Nobuhiro this week. That is
Apple Inc has hired Ulrich Kranz, a former senior executive at BMW AG’s electric vehicle (EV) division, to help lead its own vehicle efforts, people familiar with the situation said. The tech giant hired Kranz in recent weeks, about a month after he stepped down as CEO of Canoo Inc, a developer of self-driving EVs. Before cofounding Canoo, Kranz was senior vice president of the group that developed the i3 and i8 cars at BMW, where he worked for 30 years. Kranz is one of Apple’s most significant automotive hires, a clear sign that the iPhone maker is determined to build a
MARKET BOOST: Elon Musk said Tesla would resume bitcoin transactions once there is ‘reasonable’ clean energy usage by miners and denied selling a big part of his holdings Bitcoin yesterday hit a two-week peak just shy of US$40,000, after another weekend reacting to tweets from Tesla Inc chief executive Elon Musk, who fended off criticism over his market influence and said Tesla sold bitcoin, but might resume transactions using it. Bitcoin has gyrated to Musk’s views for months since Tesla announced a US$1.5 billion bitcoin purchase in February and said it would take the cryptocurrency in payment. He later said the electric vehicle maker would not accept bitcoin due to concerns over how mining the currency requires high energy use and contributes to climate change. “When there’s confirmation of reasonable