Foreign brokerages ‘key’ to the TAIEX passing 10,000 points
Analysts said the Taiwan stock exchange’s benchmark weighted index, the TAIEX, is closing in on 10,000 points and that foreign institutional investors will be one of the key factors determining when the psychological barrier is breached.
On Friday, the TAIEX gained 115.79 points, or 1.18 percent, to close at a 15-year high of 9,913.28. Since the beginning of this year, the index has risen 6.51 percent after gaining 8.08 percent in 2014.
Allianz Global Investors Taiwan fund manager Corrina Xiao said the momentum driving capital inflows could slow down, with investors still preferring large weighted stocks because of their better profits and outlook, when publicly traded companies start to release their first quarter earnings reports.
Although leading semiconductor stocks have trimmed their sales forecasts to reflect weaker fundamentals in the electronics sector during the second quarter, Xiao said semiconductor share prices have factored in near-term risks and would likely be supported by inventory replenishment later in the second quarter.
She recommended selected stocks in the Apple Inc. supply chain, including suppliers of casings, camera lenses and flexible printed boards.
The financial sector is also trending up mainly as a result of early market optimism about the potential of a Taipei- Shanghai stock connect program, the details and potential benefits of which may be discussed after Taiwan’s presidential election next year, Xiao added.
Jih Sun Securities Investment Trust Co. fund manager Shih Sheng- yuan said Taiwan- listed companies made a record-high NT$1.8 trillion ( US$58 billion) in net income in 2014, an 18 percent increase on the previous year.
Shih said he expected the weighted TAIEX index to be pushed higher in the near future after foreign institutional investors bought a net NT$68.8 billion in Taiwan shares on Thursday and Friday.