TAIEX could see corrections before mid February: analysts

Taipei, Feb. 1 (CNA) The Taiwan capitalization weighted stock index, the benchmark index on the local main board, could be looking at a moderate correction before the Lunar New Year in mid-February in the absence of major economic events, analysts have said. Paul Tsai (???), a fund manager with Jih Sun Securities Investment Trust Co., noted that in addition to the six-day holiday beginning Feb. 18, markets in Switzerland, Singapore and other countries have taken measures to screen out hot money coming from the European Central Bank's stronger-than-expected push into a quantitative easing program. No other major activity is expected ahead of the holiday since the Federal Open Market Committee, a committee within the United States Federal Reserve, repeated earlier this month it would be patient in deciding when to raise benchmark borrowing costs from zero, Tsai said. Allianz Global Investors Taiwan fund manager Corrina Xiao (???) noted the local weighted index has been boosted by inflows from the European Central Bank's quantitative easing program coupled with outperforming quarterly results and positive forecasts from leading Taiwanese electronics stocks.
With less than three weeks left before the Lunar New Year, investors are turning cautious about the local bourse, leading to moderate corrections in the TAIEX, Xiao added. He expected a strong U.S. dollar to benefit Taiwanese electronics exporters with U.S. dollar-denominated prices, as well as inventory replenishment for local plastic, textile and chemical fiber sectors after the holiday given the falling prices of international crude oil. (By Tien Yu-ping and Jeffrey Wu)