High-tech stocks could lead rebound in stock market: analysts
High-tech stocks are expected to benefit from peak season effects in the second half of the year and help Taiwan’s stock market stage a rebound after a recent slump, market analysts said Saturday.
Chen Po-chen ( ), manager of the Manulife Taiwan High Dividend Fund (
), said the bellwether electronics sector should enter a cyclical upswing in the second half of the year after inventory adjustments in the first half.
in sales should give investors a strong incentive to take advantage of the relatively low valuations of electronics shares after a recent sell-off and prop up their prices, Chen said.
Since edging close to the 10,000-point mark in late April, the Taiwan stock exchange’s weighted index has fallen 7.5 percent and closed at 9,218.37 on Thursday as foreign institutional investors continued to pull out of the market.
The exchange was closed on Friday for a public holiday.
In particular, Chen
said, Apple Inc. is likely to unveil its next generation iPhone in August and the new devices could go on sale globally in September, which means Taiwanese suppliers of Apple could reappear in the market spotlight starting in July.
Hon Hai Precision Industry Co. ( ), an assembler of iPhones and iPads, and Largan Precision Co. ( ), which supplies smartphone camera lenses to Apple, are expected to benefit from an increase of orders placed by Apple Inc. in the second half of the year.
At the same time, bloated semiconductor inventories have begun to fall gradually and should reach normal levels in mid-August, after which orders could begin to stream in again, Chen said.
The trend could attract bargain hunters to chip stocks.
Lee Meng-hsia ( ), manager of the Yuanta/P-shares Taiwan GreTai 50 ETF Fund (
50 ), said liquidity levels are expected to remain high and push share prices higher because the U.S. Federal Reserve has showed signs of maintaining a relatively loose monetary policy.
After concluding the latest two- day policymaking meeting Wednesday, Fed Chair Janet Yellen said the market should focus on the pace and trajectory of interest rate increases rather than the timing of the initial hike, which led investors to think that the Fed would raise interest rates gradually.
Lee said that since the beginning of June, electronics and semiconductor stocks in Taiwan’s over- the- counter market have fallen about 7 percent, paving the path for a rebound amid high liquidity.