Deutsche Securities forecasts mild rise for '13 TAIEX
CNATAIPEI--Deutsche Securities has forecasted that the Taiwan Stock Exchange Capitalization Weighted Index (TAIEX) will challenge 7,960 points in 2013, recording a mild increase from the end of 2012.
January 6, 2013, 12:01 am TWN
In a research note, the brokerage said the gains posted by the local bourse for 2013 are likely to be capped by various new policies, including the capital gains tax on stock investments and additional payments in the second generation national health insurance.
In addition, Deutsche Securities said, the International Financial Reporting Standards, a new accounting method that took effect at the beginning of this year, is expected to affect earnings in certain business sectors, in particular the property and department store businesses.
The benchmark weighted index gained 627.42 points, or 8.87 percent, last year to end at 7,699.50. It finished in the middle of the pack among the markets in East Asia. In the first three trading session after the New Year holiday, the index gained 1.38 percent to close at 7,805.99 Friday.
Based on the Deutsche Securities forecast, the local bourse is expected to add about 260 points or 3.38 percent in 2013.
Earlier in the week, Credit Suisse gave a more upbeat prediction, saying the local stock market is likely to hit 8,400 points, rising about 9 percent from a year earlier on the back of an economic recovery and a rebound in Taiwan's exports.
Deutsche Securities said the index's upside will be limited in the first quarter of this year as local listed companies lack momentum to boost their profitability. But if the market encounters any pullback during the period, the losses could be offset by optimism toward cross strait business exchanges, it said.
The brokerage has picked 14 stocks -- seven in the high-tech sector -- that it says have a better chance of gaining this year.
The high-tech stocks are the world's largest contract chip maker Taiwan Semiconductor Manufacturing Co., IC designer MediaTek Inc., the world's largest contract electronics supplier Hon Hai Precision Industry Co., power management solution provider Delta Electronics Inc., touch panel maker TPK Holding Co., 3C product distributor Synnex Technology International Corp., and LED firm Epistar Corp.
The other seven are old economy stocks, namely food maker Uni-President Enterprises Corp., financial leasing firm Chailease Holding Co., Mega Financial Holding Co., Evergreen Marine Corp., funeral service provider Lung Yen Life Service Corp., rubber product maker TSRC Corp., and machine tool supplier Hiwin Technolgies Corp.