Local shares last week defied heavy pressure from China’s military drills in waters around Taiwan, and investors this week are expected to pay attention to earnings results from several tech heavyweights as well as the latest economic data on exports and GDP.
The TAIEX closed at 15,036.04 points on Friday, posting a weekly increase of 0.24 percent from 15,000.07 on July 29, Taiwan Stock Exchange data showed.
Over the same period, the FTSE TWSE Taiwan 50 Index, which comprises Taiwan’s top 50 stocks in terms of market capitalization, closed up 0.93 percent at 11,750.15 points, while the Formosa Stock Index, which measures the aggregate performance of the Taiwan Stock Exchange and the Taipei Exchange, closed 0.16 percent higher at 17,113.71 points, the data showed.
Photo: CNA
“Although there are noises about the prospects for local equities in the third quarter, and the market is still digesting negative news such as anticipated inventory adjustment and weakening earnings outlook, investors’ confidence has recovered lately and returned to focus on fundamentals,” the Allianz Global Investors Taiwan Ltd (安聯投信) Taiwan equity research team said in a note on Friday.
“As market rationality gradually recovers, Taiwanese stocks which have recently lagged behind their US peers may have the opportunity to play catch-up, but the main premise is that no black swans emerge on the global political and economic fronts,” Allianz said in the note, referring to events that are extremely rare and unexpected, but would alter the market landscape substantially.
Investors this week are expected pay attention to high-tech heavyweights such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Hon Hai Precision Industry Co (鴻海精密), and earnings reports from export-oriented blue-chip stocks for the latest quarter in light of growing recession risks.
TSMC, the world’s largest contract chipmaker, is to report its revenue for last month on Wednesday.
Hon Hai, a major assembler for Apple Inc, is also scheduled to host an investors’ conference on Wednesday to announce its results from the second quarter and sales guidance from the third quarter. The company last week reported that revenue last month grew 13.66 percent year-on-year to NT$475.1 billion (US$15.86 billion), the highest July figure in the company’s history.
Other tech heavyweights — such as Asustek Computer Inc (華碩), Yageo Corp (國巨), Compal Electronics Inc (仁寶) and Quanta Computer Inc (廣達) — are also slated to release their earnings results on Thursday and Friday, when more than 40 listed firms are to hold investors’ conferences.
Yuanta Securities Investment Consulting Co (元大投顧) said market confidence has recovered since the government’s activation of the NT$500 billion National Stabilization Fund last month.
“However, with an economic downturn still lingering, we expect the stabilization fund to support the TAIEX in the near term, but is unlikely to stimulate a turnaround,” Yuanta said in a report on Thursday, adding that the market faces headwinds that increase recession risks, such as the war in Ukraine, high inflation and the US Federal Reserve’s rapid interest rate hikes.
Several sets of economic data to be released this week are expected to weigh on market sentiment, equity strategists said.
The Ministry of Finance today is to release export and import data for last month.
Despite concerns about inflation and interest rate hikes, exports last month were estimated to increase by 10 to 13 percent year-on-year to US$41.7 billion to US$42.8 billion, the ministry forecast last month.
That would be the 25th straight month of annual gains, ministry data showed.
The ministry is scheduled on Wednesday to report national tax revenue for last month, and the market’s focus is to be on the revenue for securities transaction tax, which had posted six straight months of declines through June.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) is to update its GDP growth forecast on Friday.
The DGBAS on July 29 cut its second-quarter GDP growth estimate to 3.08 percent from a previous estimate of 3.31 percent.
If the agency this week adjusts downward its 3.91 percent growth forecast for this year, the mood of investors could be affected, equity strategists said.
“Going forward, we anticipate the TAIEX to continue to consolidate, but with individual names to still see room for upward rotation,” Yuanta said.
The consultant said its favored stocks are companies in electric vehicle supply chains and the renewable energy sector, concept plays related to improving networking and industrial PC demand, and Apple suppliers experiencing high seasonal demand.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
RSS