Yuanta Se­cu­ri­ties leaves 10,300-point tar­get for Taiex un­changed

The China Post - - LOCAL -

Yuanta Se­cu­ri­ties In­vest­ment Con­sult­ing said Wed­nes­day that it has de­cided to leave a 10,300-point tar­get for the Tai­wan Stock Ex­change Cap­i­tal­iza­tion Weighted Stock In­dex (Taiex) un­changed de­spite re­cent volatil­ity.

In an in­vest­ment fo­rum held by Yuanta, com­pany Pres­i­dent Vin­cent Chen said he ex­pects the lo­cal eq­uity mar­ket to climb out of the cur­rent dol­drums from the third quar­ter, a peak sea­son for the bell­wether elec­tron­ics sec­tor.

Chen said that due to listed com­pa­nies’ plans to go ex-div­i­dend start­ing from late June, which has dragged down the weighted in­dex on the main board by more than 300 points, bar­gain hun­ters are ex­pected to re­turn to the trad­ing floor. He said that re­cent sell-offs have also paved the way for a mar­ket re­bound.

Af­ter re­peat­edly fail­ing to close above 10,000 points in late April, the lo­cal main board started to fall. Since late April, the weighted in­dex has dropped more than 5.7 per­cent, clos­ing at 9,397.31 Wed­nes­day.

Chen said that mar­ket mo­men­tum is ex­pected to pick up by the end of the third quar­ter, likely in late Au­gust.

He said that whether the in­dex will stand well above the 10,000-point level af­ter breach­ing that level will de­pend on whether in­vestors spend their cash div­i­dends on fur­ther in­vest­ments.

Among the large-cap stocks to dole out fat cash div­i­dends, Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC), the most heav­ily weighted stock in Tai­wan, will is­sue NT$4.5 (US$0.15) in cash div­i­dends for each share, which will in­ject more than NT$100 bil­lion into the mar­ket.

How­ever, Yuanta cited the re­sults of a sur­vey it con­ducted as say­ing that earn­ings posted by listed com­pa­nies on the main board and on the over-the-counter mar­ket could grow only 6 per­cent on av­er­age in 2016, down from an es­ti­mated 12 per­cent in­crease for 2015.

Mean­while, Wang Cheng-hung), Yuanta’s chief economist, said that the mo­men­tum of Tai­wan’s eco­nomic growth is ex­pected to ac­cel­er­ate in the third quar­ter as the U.S. econ­omy, the world’s largest, re­mains on the road to re­cov­ery, push­ing up de­mand.

In ad­di­tion, Wang said the paces of other ma­jor economies such as China, Europe and Ja­pan are ex­pected to speed up on the back of their eased mon­e­tary poli­cies, start­ing from the July-Septem­ber pe­riod, which could boost Tai­wan’s eco­nomic fun­da­men­tals.

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