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Taiex could challenge 10,000 points this year

Taiex could challenge 10,000 points this year

Taipei, May 30 (CNA) The Taiwan Stock Exchange Capitalization Weighted Stock Index (Taiex) could challenge 10,000 points later this year on the back of ample liquidity and optimism toward corporate earnings, a local fund manager said Saturday. Chan Chu-kuang, manager of the BlackRock Baoli Fund, said that although the U.S. Federal Reserve could raise interest rates later this year, other major economies such as China, Europe and Australia are still easing their monetary policies, keeping market liquidity at high levels. Chan said that listed companies on the local main board are expected to post a more-than 10 percent year-on-year increase in earnings in 2015, and such a strong bottom line will put the Taiwan market ahead of many of its rivals in Asia. In May, the weighted index fell 1.21 percent from a month earlier, with the index falling into consolidation mode amid cautious sentiment after the market repeatedly breached 10,000 points in late April but failed to close above that level. In addition, a move by the government to lower its forecast of Taiwan's 2015 economic growth to 3.28 percent from 3.78 percent placed more downward pressure on share prices in May. Such caution also dragged down turnover for the month. On May 29, the last trading session in May, the weighted index closed down 0.12 percent at 9,701.07 points. The local bourse has lagged behind regional markets such as Tokyo and Shanghai. However, Chan said that the relatively low valuations resulting from the losses in May has provided investors with good buying opportunities. The analyst added that the recent consolidation in the equity market was partly caused by worries over inventory adjustments in the bellwether electronics sector, but growth momentum in the high-tech sector is expected to pick up in the second half of the year, paving the way for the gains in share prices. Chan said that the average dividend yield growth of Taiwan's listed companies is expected to top 3 percent, the highest among the equity markets in Asia, and such a good return is expected to lead foreign institutional investors to raise their holdings in the local bourse. Chan said that he would prefer to pick up large-cap stocks in electronics and non-high tech sectors in Taiwan, expecting that their healthy fundamentals will boost share prices in the second half of the year. (By Tien Yu-pin and Frances Huang)

Updated : 2021-09-19 11:30 GMT+08:00