The TAIEX would hover at about 17,470 points at the end of this year, with the weighted index witnessing more volatility in the third quarter due to uncertainty over the US’ monetary policy, UBS Securities Pte Ltd, Taipei Branch said yesterday.
The TAIEX yesterday closed up 0.07 percent at 17,075.55 points, down 3 percent from a record high of 17,595 points on April 27, but up 16 percent year to date, Taiwan Stock Exchange data showed.
The benchmark index is likely to remain at this high level at the end of the year, despite a spate of COVID-19 infections, as solid corporate revenues and exports should support the index, UBS analyst Ally Chen (陳玟瑾) told a videoconference.
Photo: Kelson Wang, Taipei Times
“For those companies we cover, we estimate their combined profits would grow more than 30 percent this year from last year,” she said.
Although the TAIEX fell after COVID-19 cases surged last month, it has quickly recovered, she added.
However, “huge volatility” in Taiwanese equities is also possible next quarter, as local stocks would be affected once the US Federal Reserve announces new liquidity-tightening measures, she said.
In 2013, when the Fed announced that it was ending its bond-buying program, which it began in 2008 in response to the financial crisis, the news took a toll on local stocks, Chen said.
However, by the time the Fed started reducing its purchases in 2014, local stocks had regained their momentum due to solid fundamentals, she said.
“Therefore, we might see a similar impact on the TAIEX next quarter, and we suggest investors avoid overpriced stocks that are less resilient to a tighter monetary policy,” Chen said.
Investors are also advised to monitor several key gauges, including corporate revenues, growth in demand for end products from the US and Europe after COVID-19 lockdown measures end and inflation’s effect on corporate earnings, she said.
Asked if local shipping stocks would remain strong due to rising freight rates, UBS head of Taiwan research James Kan (甘清仁) said that COVID-19 vaccination programs would play a role in it, because if more people are able to return to their posts, supply chain disruptions and port congestion would be relieved.
The vaccination rate in the US is predicted to hit 60 percent next month, which would normalize many businesses, he said.
“It is hard to imagine that freights rates would remain that high for long,” Kan added.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) last week recorded an increase in the number of shareholders to the highest in almost eight months, despite its share price falling 3.38 percent from the previous week, Taiwan Stock Exchange data released on Saturday showed. As of Friday, TSMC had 1.88 million shareholders, the most since the week of April 25 and an increase of 31,870 from the previous week, the data showed. The number of shareholders jumped despite a drop of NT$50 (US$1.59), or 3.38 percent, in TSMC’s share price from a week earlier to NT$1,430, as investors took profits from their earlier gains
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
CHINA RIVAL: The chips are positioned to compete with Nvidia’s Hopper and Blackwell products and would enable clusters connecting more than 100,000 chips Moore Threads Technology Co (摩爾線程) introduced a new generation of chips aimed at reducing artificial intelligence (AI) developers’ dependence on Nvidia Corp’s hardware, just weeks after pulling off one of the most successful Chinese initial public offerings (IPOs) in years. “These products will significantly enhance world-class computing speed and capabilities that all developers aspire to,” Moore Threads CEO Zhang Jianzhong (張建中), a former Nvidia executive, said on Saturday at a company event in Beijing. “We hope they can meet the needs of more developers in China so that you no longer need to wait for advanced foreign products.” Chinese chipmakers are in
POLICY REVERSAL: The decision to allow sales of Nvidia’s H200 chips to China came after years of tightening controls and has drawn objections among some Republicans US House Republicans are calling for arms-sale-style congressional oversight of artificial intelligence (AI) chip exports as US President Donald Trump’s administration moves to approve licenses for Nvidia Corp to ship its H200 processor to China. US Representative Brian Mast, the Republican chairman of the US House Committee on Foreign Affairs, which oversees export controls, on Friday introduced a bill dubbed the AI Overwatch Act that would require the US Congress to be notified of AI chips sales to adversaries. Any processors equal to or higher in capabilities than Nvidia’s H20 would be subject to oversight, the draft bill says. Lawmakers would have
RSS