《TAIPEI TIMES 焦點》 TAIEX to open strong, steady: analysts

‘HEALTHY FUNDAMENTALS’: Market watchers said that the local bourse was likely to open well and remain positive, but that it lacked the catalysts for steep profits

The TAIEX is likely to consolidate with positive bias today, as institutional investors start to build up their positions again following the New Year holiday. However, cautious sentiment might linger amid a lack of major catalysts, analysts said yesterday.

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The main trading index ended up 0.42 percent to 9,307.26 on Wednesday last week on light turnover of NT$59.15 billion （US$1.86 billion）, Taiwan Stock exchange statistics showed.

“The local bourse might open higher on the back of healthy fundamentals, but the room for upward rallies is limited now that it has traded above monthly, quarterly and yearly moving averages,” state-run Hua Nan Securities Co （華南永昌投顧） chairman David Chu （儲祥生） said by telephone.

Overall, the TAIEX gained 8.08 percent last year, outpacing other markets in Asia such as South Korea, Hong Kong and Singapore, but lagging behind China and Japan.

Though international research institutes have trimmed forecasts for global GDP growth this year, most agree the world’s economy is set to expand, which is good news for Taiwan’s exports, Chu said.

Chu expects the TAIEX to trade in a tight range of between 9,350 and 9,250 this week and in the first quarter as a whole due to the absence of categorical drivers, with technology companies at the low season of their business cycle.

Taiwan is home to the world’s leading contract chipmaker, chip designers, laptop makers and critical component suppliers.

Turnover might improve going forward, but not at a fast rate, Taishin Securities Investment Trust Co （台新投信） chairman Andy Wu （吳火生） said by telephone.

Institutional and professional players might take a more active approach than before the holidays, but would continue to exercise caution over their investments, Wu said.

Investors usually hold onto cash over the holidays to avoid falling prey to something unexpected.

Wall Street failed to shed much guidance in the past few days, as the Dow Jones added 9.92 points, or 0.06 percent, to move to 17,832.99 with leading US stocks barely moving on the first trading day of this year, Wu said.

It is encouraging that share markets in the US and China both performed well last year, trends that would feed further expectations of bullish markets going forward amid an absence of major downside risks on the horizon, Wu said.

“Nevertheless, investors should watch out for potential pullbacks,” Wu said.

Wu expects the TAIEX to find support at 9,300 and hit resistance at 9,593 — the highest level recorded last year.

Turnover might hit the NT$800 billion level again this week but active traders might hold off to weigh asset allocation decisions, even though the legislature approved a three-year respite on a requirement for them to pay extra stock transaction taxes, Wu said.

新聞來源：TAIPEI TIMES