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UBS Securities expects Taiex to challenge 9,650 points in 2015

UBS Securities expects Taiex to challenge 9,650 points in 2015

Taipei, Jan. 20 (CNA) The Taiwan stock exchange's benchmark index, the Taiex, could challenge 9,650 points in 2015 because of expected strength in the bellwether electronics sector, especially in the second half of the year, according to UBS Securities. William Dong, head of research at UBS Securities Taiwan, said the local bourse is expected to remain in consolidation mode in the first quarter because it is the traditional slow season for the high-tech sector. The market could also come under pressure and trade within a narrow range in the second quarter if the U.S. Federal Reserve raises interest rates as expected, the analyst said. Peak season effects should bolster the electronics sector in the second half of the year, however, which should provide support to the broader market, and the government may also take measures to stimulate the economy ahead of the presidential election in 2016, Tong said. That means the index should perform better later in 2015 than earlier, said Dong, who predicted that the Taiex would hit 9,650 points in the second half of the year. In 2014, the Taiex closed about 8 percent higher at 9,307.26 on the back of large foreign fund inflows, as major central banks in the world, including the Fed and the Bank of Japan, pumped funds into the market. On Monday, the weighted index closed 0.39 percent higher at 9,174.06. As of 12:29 p.m. of Tuesday, the index had added 0.71 percent to 9,239.45. Dong said that because corporate earnings in Taiwan rose about 36 percent in 2014, it set a high base of comparison that could make the market's growth this year appear relatively slow. He expected corporate earnings growth this year to only range between 3 and 4 percent. The moderate growth forecast was also made based on an assumption that the global market will lack killer products, such as last year's iPhone 6 and iPhone 6 Plus from Apple, that will lift Taiwanese suppliers' shipments significantly. UBS Securities advised that investors pick up defensive stocks, such as telecom stocks, consumer-oriented stocks and large-cap high-tech stocks, in Taiwan. (By Lo Hsiu-wen and Frances Huang)


Updated : 2021-09-19 08:06 GMT+08:00