Bank of America Merrill Lynch yesterday maintained its positive outlook on the local stock market for the next month, adding that investors should be tactically overweight in the high-tech sector to take advantage of this upturn.
The investment bank’s research team said the TAIEX would likely reach a peak of 8,600 points in the near future — possibly as early as this month or next month, or in the fourth quarter — amid growing optimism, Tony Tseng (曾省吾), head of Taiwan Research at Merrill Lynch Securities, told reporters yesterday.
The target is based on the TAIEX’s five-year price-to-earnings ratio average of 19.4 times and price-to-book ratio of 2.1 times, Tseng said.
The index fell 1.46 percent to 7634.92 yesterday, matching a decline in global shares. Market turnover was NT$74.98 billion (US$2.36 billion). Foreign investors and Chinese qualified domestic institutional investors were net sellers of NT$4.13 billion.
The forecast was also based on new positive signs, including an improving technology sector, which accounted for half of the market’s value, the imminent signing of an economic cooperation framework agreement (ECFA) between Taiwan and China, as well as stable monetary policy, Tseng said in a report dated Thursday.
Tseng said investors should be overweight in tech shares, as stock prices are expected to recover amid easing labor and component shortages and improving gross margins.
Top picks of tech stocks included Mediatek Inc (聯發科), the nation’s biggest handset chip designer, electronics manufacturing service provider Hon Hai Precision Industrial Co Ltd (鴻海精密), power supply provider Delta Electronics Inc (台達電), camera module maker Largan Precision Co Ltd (大立光), Kinsus Interconnect Technology Corp (景碩科技) and Synnex Technology International Corp (聯強).
Merrill Lynch, in collaboration with Taiwan Stock Exchange Corp, is hosting a two-day “Taiwan, Technology and Beyond” conference in Taipei beginning today. More than 110 corporations and about 400 institutional investors and fund managers from around the world are expected to attend the conference.
ADDITIONAL REPORTING BY CNA
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS