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UBS Securities raises Taiex target on national fund support

UBS Securities raises Taiex target on national fund support

Taipei, Oct. 8 (CNA) Swiss brokerage firm UBS Securities raised its forecast for the Taiwan stock exchange's benchmark index, the Taiex, for the end of the year from 7,800 points to 8,250 Thursday, on the back of the engagement of a national fund. "We expect the Taiex to continue to consolidate in the near term. The key missing link, in our view, is still the lack of a fundamental catalyst," William Dong (???), equities and research head of UBS Securities' Taipei branch, wrote in a note to clients. "On a more positive note, we expect the Taiwan government's recent engagement of the National Stabilization Fund to provide some downside support to the Taiex," he said. The National Stabilization Fund, which is intended as a buffer against any economic or other factors that could cause disruption of the local bourse, began buying stocks Aug. 25 to prop up share prices in Taiwan amid heavy volatility in global markets. Dong said the Taiwan market appears to have entered a period of temporary stability, with the Taiex trading in a range between 8,000 and 8,500. "We view this as encouraging, because most of the near-term negatives, such as weak export numbers and an uninspiring earnings outlook, appear to be within the price range," the analyst noted. "However, we believe the more important questions are whether the increased market stability is here to stay, or whether there is more volatility to come," he added. By sector, Dong said he maintains "a balanced position" in Taiwan by rating "overweight" on telecom and consumer staples, "underweight" on materials, and "neutral" on tech and financial stocks. As of 11:04 a.m. Thursday, the Taiex had risen 0.06 percent to 8,500.14 points. (By Jeffrey Wu)


Updated : 2021-09-22 16:41 GMT+08:00