For­eign bro­ker­ages ‘key’ to the TAIEX pass­ing 10,000 points

The China Post - - LOCAL -

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.

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