With Taiwan’s presidential election concluded, the local stock market would see reduced political uncertainty, while investors are expected to focus back on fundamentals, Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said on Saturday.
Uncertainty resulting from the election had sent the local stock market into consolidation mode, with the TAIEX falling 6.31 points last week to end at 17,512.83 on Friday, Huang said.
It was the second consecutive week of decline for the benchmark index.
Photo: CNA
Meanwhile, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is to hold an investors’ conference on Thursday, during which it would likely discuss its outlook for the IC sector, offer details on its business performance in the fourth quarter of last year and give guidance for this year.
Investors at home and abroad have been keeping a close eye on the TSMC conference in the hope of gaining more clues about the development of the semiconductor industry following a slow year amid inventory adjustments.
Hua Nan Securities Investment Management Co (華南投顧) chairman David Chu (儲祥生) said that the stock market’s fundamentals would not really be affected by the results of the presidential election.
Democratic Progressive Party (DPP) presidential candidate and Vice President William Lai (賴清德) and his running mate, Hsiao Bi-khim (蕭美琴), won the presidential election with 5,586,019 votes, or 40.05 percent of the total, Central Election Commission data showed.
“Any election is only a brief interlude. Investors will quickly return to fundamentals,” Chu said.
After a recent aggressive rate hike cycle, the US Federal Reserve is expected to start cutting rates this year, and stock markets are likely to ride waves of ample liquidity due to an inflow of foreign funds resulting from a weak US dollar, he said.
Foreign institutional investors are expected to continue buying Taiwanese shares this year after registering a net buy of more than NT$420 billion (US$13.5 billion) in shares during the November-to-December period, pushing the TAIEX toward 18,000 points, he added.
Given that the DPP would continue to hold the presidency after the election, stocks in industries supported by the government, such as green energy, biotech and military equipment suppliers, could move higher today, Taishin Securities Investment Advisory Co (台新投顧) analyst Tony Huang (黃文清) said.
In addition, buying could also focus on semiconductor stocks and stocks related to artificial intelligence development, he said.
However, China could expand its suspension of certain benefits provided by the Economic Cooperation Framework Agreement due to the DPP victory, Chu said.
On Dec. 21 last year, the Chinese Customs Tariff Commission announced it was suspending preferential tariffs on 12 petrochemical products, including propylene and paraxylene, citing trade barriers imposed by Taiwan on similar products.
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