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Credit Suisse cuts year-end target for Taiex index to 7,300

Credit Suisse cuts year-end target for Taiex index to 7,300

Credit Suisse analysts toned down their outlook for Asian tech sectors in the remainder of this year and cut the year-end target for the Taiex index to 7,300 from 8,500 points due to decelerating macroeconomic indicators and slowing U.S. consumption.
They also expected tech stocks on Asian markets to trade within a narrow range. Manish Nigam, Head of non-Japan Asia Technology Research for this international financial services group, said they downgraded forecasts because macro factors had worsened at a faster-than-expected pace.
The U.S., behind China, has been the biggest buyer of Taiwanese goods. But the world's largest economy was losing momentum - retail sales decelerated in June and July, manufacturing orders slipped and durable goods orders declined, said Randy Abrams, the group's Head of Taiwan Equity Research. He added that corporate spending from the IT sector flattened out in the third quarter of this year and that Taiwan's municipal elections in November would not have a positive effect on the local stock market. The local PC companies, who have an 80 percent share of the global PC market, turned more conservative than a month ago.
"All major PC brands were cautious because of rising inventory, macroeconomic uncertainties and the impact of Apple's iPad on netbooks," said Robert Cheng, the group's Director of the Tech Hardware Equity Research. "Inventory numbers of these brands rose to 25 percent in the second quarter of this year from 12 percent in the first quarter."
Despite the sliding demand for PCs and flat-screen TVs, smartphones and Tablet PCs have recently emerged as star end-products. This would be a great chance for Taiwan's tech manufacturers but they also faced tougher challenges this year thanks to low consumer demand, Cheng added.
From Wednesday, the foreign financial institution and the Taiwan Stock Exchange Corporation held the 3-day Asian Technology Conference.