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Bourse to challenge 8,000 points in Q4: firm

TAIPEI--The local bourse is expected to challenge the 8,000-point level in the fourth quarter of this year on the back of the peak-season effect of the high-tech sector during the three-month period, according to KGI Securities Investment Advisory Co.

In a research report released Friday, KGI said international consumer electronics brands have launched or will unveil new products, such as smartphones, tablet computers and ultrabook computers, to boost buying in the market, which is expected to help local high-tech firms generate higher earnings in the upcoming three months.

Encouraged by the improving bottom line of the electronics sector, investors here are expected to chase share prices in the high-tech sector to push the index higher, KGI said.

The weighted index closed up 0.40 percent at 7,715.16 points on the Taiwan Stock Exchange Friday.

KGI said iPhone 5, the latest version of Apple Inc.'s smartphones that was launched earlier this month, has been spotlighted in the consumer electronics market.

The investment consulting firm said investors are likely to pick up stocks in the Apple supply chain on expectations that their shipments will be lifted by the popularity of iPhone 5.

Among the firms in the Apple supply chain are Hon Hai Precision Industry Co., which churns out iPhone and iPad for Apple, metal casing supplier Foxconn Technology Co. and flexible printed circuit board maker FLEXium Interconnect Inc.

KGI said the local bourse is also riding waves of ample liquidity as major central banks in the world have come up with stimulus measures to pump more funds into the market, including the U.S. Federal Reserve, which launched a third round of quantitative easing (QE3) in mid-September.

Under such favorable circumstances, it is possible for the local stock market to go higher as foreign institutional investors continue to build up their portfolios by picking up more local stocks.

Although the local bourse staged a rebound in recent sessions due to the QE3 effect, the market has not become overheated yet, paving the way for upward movement in the fourth quarter, KGI said.

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