The TAIEX might rally to 26,800 points in the first half of next year, uplifted by major tech firms led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) that would continue to benefit from strong global demand for electronics used in artificial intelligence (AI) applications, SinoPac Financial Holdings Co (永豐金控) said on Wednesday.
The forecast suggests a 15 percent gain from yesterday’s close at 23,267.94. The TAIEX, which closed up for a fourth straight session yesterday, has jumped 29.69 percent so far this year, Taiwan Stock Exchange data showed.
TSMC, the world’s largest chip maker, is expected to see its business grow 20 percent, thanks to its technology leadership and active spending by US cloud service providers on AI development, SinoPac chief economist Jack Huang (黃蔭基) said at a news conference in Taipei.
Photo: CNA
“Once TSMC shares rally above the previous high of NT$1,110, the TAIEX would emerge from consolidation and make a new record,” said Golden Huang (黃柏棠), an executive vice president at SinoPac Securities Investment Service Corp (永豐投顧).
Positive corporate earnings growth and healthy inventory levels would also lend support to the benchmark index before an anticipated tariff hike by the US hitting the market later in the year, he said.
Corporate profit growth next year would reach as high as 57 percent in the first quarter, but slow to 17 percent in the final quarter on an annual basis, he added.
Still, Taiwan’s fund houses would replace foreign institutional players in setting the TAIEX direction, as the fever for exchange-traded funds would be sustained, the company said.
SinoPac Financial also forecast Taiwan’s GDP would grow quarter by quarter next year — from 1.67 percent in the first quarter and 2.42 percent in the second quarter to 3.01 percent in the third quarter and 4.61 percent in the fourth quarter — with a full-year growth of 2.96 percent, Jack Huang said.
The global economy would face more uncertainties and challenges next year as US president-elect Donald Trump returns to the White House and puts his tariff threats into action, he said.
“Trump will definitely increase tariffs on imports from around the world, though the amount would vary depending on specific items and their origins,” he said.
The tariff hikes would fuel inflation, making the US Federal Reserve hesitant about cutting interest rates in the fall of next year, said Sharon Lin (林秀貞), an executive vice president at SinoPac Securities.
The Fed would go ahead and lower interest rates by 25 basis points in the first and second quarter, as US consumer prices move toward the 2 percent target before the tariffs come into play, Lin said.
By contrast, Taiwan’s central bank would keep interest rates unchanged for all of next year, as rate cuts would send an easing signal and boost real-estate lending, at odds with its effort to guide money away from real estate, she said.
The US dollar would remain strong on the back of Trump’s protectionist practices, a welcoming trend for export-oriented economies including Taiwan, as a weak New Taiwan dollar would make Taiwanese products more competitive on the world stage, SinoPac Financial said.
Cathay Financial Holding Co (國泰金控) is also optimistic that the TAIEX would climb above 25,000 points next year on the back of GDP growth of 3 percent, the company said last month.
However, a potential tariff hike under Trump and a high comparison base this year are set to be the two key factors shaping the local equity market next year, Cathay United Bank (國泰世華銀行) lead economist Lin Chi-chao (林啟超) said on Nov. 19.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
RSS