Foreign investors upbeat about 2014 Taiwan stock market
Taiwan News, Staff Writer
2014-01-13 01:43 PM
Boosted by government's relaxation of day trading limit, the trading volumes of Taiwan Stock Exchange (TWSE) last week hit new record highs within three years. Foreign institutional investors have revised upward Taiwan’s stock market index of this year, including Goldman Sachs and UBS Securities, who revised TWSE from 9,200 and 8,850 respectively to 9,500 and 9,050 points at the highest.

JP Morgan Securities (Taiwan) Ltd chairman Lin Chao-huan indicates that the move by the government to relax day trading rule has successfully lured investors back to the trading floor and boosted trading volume. Another investor sees TWSE to rally this month as the first month of the year is a traditional peak season of stock trading in Taiwan, saying the momentum will remain if there is no bad surprise for international financial markets.

Timothy Moe, chief Asia-Pacific regional equity analyst of the US-based Goldman Sachs Securities, says that buying Taiwan stock market might be a significant strategy for foreign institutional investors in the first half of the year, as Taiwan stock market would be less impacted amid international capital outflows compared to other stock markets in Asia-Pacific region.

UBS Securities (Taiwan) executive William Dong is also optimistic about Taiwan's stock market performance in January based on his observations of two factors. First, de-inventory of technology companies is near the end, and the companies would increase shipping rates starting from the second quarter, in particular among the IC and electronic component sectors. New iPhone, which is rumored to be launched in the third quarter, would bring good news to Taiwan stock market. Second, stable global economic recovery is a highly positive factor to export-oriented Taiwan economy. Dong predicts that Taiwan's GDP growth and corporate earnings for 2014 could reach 3.7 percent and 10.4 percent respectively.

Financial Supervisory Commission (FSC) lifted the day trading limit as part of the efforts to revitalize Taiwan's stock market. Day trading refers to a short-term trading method which investors buy and sell the same stock on the same day.

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