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UBS Securities trims year-end Taiex target on slowing tech demand

UBS Securities trims year-end Taiex target on slowing tech demand

Taipei, July 20 (CNA) Swiss brokerage firm UBS Securities has cut its forecast for the Taiex, Taiwan stock exchange's benchmark index, for the end of the year from 9,750 to 9,200 points, making its third downward revision in two months.
Taiwan's exports slowed down in the first half of 2015, and "we believe conditions are unlikely to improve substantially in the second half," William Dong, equities and research head of UBS Securities' Taipei branch, wrote in a note to clients on July 17.
"With many tech companies citing low demand visibility and/or ongoing inventory adjustments, we believe a seasonal pickup in tech shipments may prove short-lived," Dong said. "One exception though is Apple's supply chain."
"For non-tech, the likes of bicycle and tire manufacturers and cement producers continue to face headwinds from the slowdown in China," he added.
Dong suggested that investors adopt a balanced strategy as "market jitters" are expected to increase in November and December, especially with the approach of Taiwan's presidential election in January 2016. The analyst changed his rating on semiconductors from "overweight" to "neutral" and on consumer staples from "neutral" to "overweight." He also moved food maker Uni-President Enterprises Corp. onto UBS Securities' most preferred stock list, replacing chip packaging service provider Advanced Semiconductor Engineering Inc. (ASE) and chip designer MediaTek Inc.
In a report date June 4, the brokerage had dropped its Taiex target from 10,600 to 10,000 points, citing concerns over fundamentals and uncertainty over the outcome of the 2016 presidential election. In another report on July 2, UBS Securities again lowered its Taiex target, from 10,000 to 9,750 points, citing potential risk to earnings.
As of 9:43 a.m. Monday, the Taiex had risen 0.46 percent to 9,087.57 points. (By Jeffrey Wu)


Updated : 2021-05-11 20:43 GMT+08:00