Corporate earnings and business outlook at listed firms would dictate the local equity market’s direction this week, while investors would especially be waiting for the Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) investors’ conference scheduled for Thursday, equity strategists said.
Despite concerns over a resurgence of COVID-19 in China and its effects on the global economy, market movements this week might follow the activities of foreign institutional investors, who bought a net NT$6.61 billion (US$215.3 million) of shares on the main board in this year’s first trading week, strategists said.
Foreign investors last year sold a net NT$1.23 trillion of shares, the highest amount on record.
Photo: CNA
Flat-panel maker Innolux Corp (群創), Powerchip Semiconductor Manufacturing Corp (力積電) and Shin Kong Financial Holding Co (新光金控) were the top three stocks bought by foreign institutional investors last week, with financial stocks making up five of the top 10, Taiwan Stock Exchange data showed.
The TAIEX on Friday closed up 0.51 percent at 14,373.34 points for a weekly increase of 1.67 percent as local and foreign institutional investors bought shares, exchange data showed.
Domestic proprietary traders last week added a net NT$3.17 billion of local shares and investment trust firms added a net NT$2.62 billion, exchange data showed.
Electronics shares were last week’s best performers with a 2.22 percent gain, followed by financial shares, which rose 1.63 percent, PGIM Securities Investment Trust Enterprise Co (PGIM, 保德信投信) analyst Sun Chuan-shu (孫傳恕) said in an investment note on Friday.
Electronics stocks often perform well in January, Sun said, citing historical patterns.
However, as the Lunar New Year holiday this year is earlier than usual, fund managers are focusing on short-term trading, he said, adding that the chances of seeing big moves in the market are low.
Taiwanese stocks are expected to face headwinds in the first half of this year, Sun said, citing a slowdown in the manufacturing purchasing managers’ index (PMI), a downward revision in profit forecasts for technology stocks and recession concerns in major economies.
While the TAIEX has stayed above 14,000 points in recent sessions, it would need more vigor to stage a substantial rebound, which is unlikely ahead of the Lunar New Year holiday, while selling in small and mid-cap stocks might occur ahead of the week-long holiday, SinoPac Securities Investment Service Corp (永豐投顧) said in a separate note.
It is normal for investors to trim their exposure ahead of long holidays, SinoPac said.
Tuesday next week is the last trading day before the holiday.
Equity markets in Taiwan are to reopen on Jan. 30.
If TSMC and smartphone camera lens maker Largan Precision Co (大立光) reveal positive business guidance at their investors’ conferences on Thursday, it could support their stock prices and serve as a catalyst for local shares to move up in the short term, SinoPac said.
Investors might also take their cue from financial results released by other local companies this week. Networking chip supplier Realtek Semiconductor Corp (瑞昱半導體), DRAM chipmaker Nanya Technology Corp (南亞科技) and Formosa Plastics Group’s (台塑集團) four major subsidiaries are among the companies that are to report their earnings this week.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
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