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TAIEX forecast to rise to 11,300 points in 2018

2017/12/04 16:44:09

Taipei, Dec. 4 (CNA) Two Asia-based brokerages have forecast that the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) will rise to 11,200 points at least by the end of 2018 on the back of improving profitability of companies listed on the main board.

In a research note released Monday, an Asian brokerage said it remained upbeat about the bottom line of Taiwan's electronics sector, which is expected to continue to lead the TAIEX to a high of around 11,300 points next year.

On Monday, the weighted index on the main board closed up 50.74 points, or 0.48 percent, at 10,651.11 after a 2.34 percent fall last week.

The brokerage said that although the TAIEX fell 2.2 percent in November, bargain hunters are likely to emerge soon, taking advantage of the relatively low valuations, as high-tech firms in Taiwan remain profitable. Last week alone, the local main board dropped 2.34 percent.

The semiconductor sector is expected to continue to serve as a driver of the broader market in 2018, as global demand grows for the premium iPhone X, one of the three new iPhone models unveiled in September, the brokerage said.

Taiwanese suppliers to Apple account for about 40 percent of the combined market capitalization of the main board and the over-the-counter market.

The brokerage has recommended 12 high-tech stocks, including the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co., the world's largest integrated circuit packaging services provider Advanced Semiconductor Engineering Inc., memory chip maker Nanya Technology Corp., contract notebook computer maker Inventec Corp., and Hon Hai Precision Industry Co., which assembles iPhones and iPads.

In addition, investors would be well advised to pick up select non-tech stocks, such as CTBC Financial Holding Co. and E. Sun Financial Holding, the brokerage said.

Another Asian brokerage also forecast that the TAIEX will soar past 11,200 points by the end of next year.

It said increasing shipments of the iPhone X will boost the earnings of firms listed on the main board by an annual 10.7 percent in 2018.

The securities house said was recommending nine stocks, including Hon Hai, power management system supplier Delta Electronics Inc., IC designer MediaTek Inc., Formosa Plastics Corp., China Steel Corp., and E. Sun Financial.

CNA cannot identify the brokerages because media outlets in Taiwan are not allowed to report the names of foreign brokerages when they give price forecasts for specific stocks and fluctuations of the index.

(By Jeffery Wu and Frances Huang)