Experts express optimism over stocks in near term
The China Post news staffTAIPEI, Taiwan -- Experts yesterday expressed their optimism over Taiwan stocks in the short term, even though the market had remained bearish during the first part of the month.
January 21, 2013, 12:02 am TWN
The local bourse was tepid during most parts of January, yet Friday stocks rose 116 points to lift the TAIEX to 7,732, some 30 points above the approximately 7,700 closing figure that the TAIEX saw at the end of December.
The reason that Taiwan stocks were lackluster over the previous weeks, despite positive economic figures reported by the United States and China, was weakness in shares related to Apple, which may reportedly lower shipments and orders placed with its Taiwan supply chain partners, said Chung Chao-yang, fund manager with Allianz.
“With speculation of Apple order cuts, Taiwan electronics shares were down and under-performed in the broader market,” Chung said. “At the same time, trade volume averaged around NT$70 billion, which is still a little low.”
Yet Chung said there is still room for optimism, as foreign investors did not stage a mass sell-off even as the TAIEX fell in recent weeks. With Wall Street hitting a new high and Chinese stocks staging a rebound, the room is limited for a correction on the TAIEX, which will find support at 7,500, he said.
“If a minor correction appears this week, investors may consider certain value stocks, such as those issued by firms with large businesses in China,” he said.
Chen Huang-jen, fund manager with Capital Securities, expressed confidence in Taiwan stocks, especially after semiconductor manufacturers gave upbeat outlooks for the industry despite a slow first quarter and a rising New Taiwan dollar against the greenback.
Most IC firms have cited the second quarter as the starting point of a rebound, after inventory adjustment efforts by clients come to an end.
Lin Chia-hsing, fund manager with Jih Sun, also voiced his optimism, which he said was based on two factors: a transfer of funds by global investors from bonds to stocks, and an improving macroeconomic situation around the world.
“The upward trend that began at the end of November last year was the result of overwhelming funds in the market,” he said. “And, based on the fact that investors have short-sold 870,000 units of stocks (each unit is 1,000 shares) and are expected to buy shares to cover them before March, I'd say stocks will be robust all the way from now until March.”
Separately, experts yesterday urged investors to pick certain stocks that are favored by Taiwan's wealth management firms.
One of these stocks is memory chip manufacturer Winbond, of which asset management firms net-purchased 12,829 units last week.
According to experts, Winbond is a good pick due to an increase in DRAM prices on reduced production capacity and supply after several DRAM firms have either withdrawn from the market or changed their business models.
Other recommended stocks include China Airlines and EVA Air, which will benefit from a surge in business for running Lunar New Year charter flights; electronic retailer Synnex and Fubon Financial Holding, both of which are expected to earn tons of money in China; and shares issued by various construction firms, which are set to work on developmental cases after the Lunar New Year's.