Local bourse seen to trend up in fourth quarter

The China Post news staff

TAIPEI, Taiwan — Institutional investors are expecting the Taiwan Stock Exchange to trend upward in the fourth quarter of the year, and are likely to zero in on high-tech shares, electronics stocks and China-concept issues after the Moon Festival falling on Sept. 25, according to market sources.

The weighted share price index of the local bourse has rallied in the fourth quarter over the past six consecutive years, with the growth rate averaging at 15 percent, the sources said. Accordingly, they expect strong bullish performance to come in October or the starting month of the fourth quarter. With the fourth quarter traditionally a peak season for high-tech info and communications industries, and coupled with the approaching of the Double-Ten National Day and with more than NT$100 billion in government funds poised for stock investment, the local bourse will definitely soar significantly in the next quarter, the sources continued. Market experts advised individual investors to target such promising stock categories as IC design, solar energy, LED, and communications networks, especially those with low earnings/price ratios and robust business performances.

In fact, the bullish sentiment of the local bourse seen Friday, the last trading session before the four-day Moon Festival holiday, suggested that the bourse would continue to rally after the festival, especially given the fact that domestic institutional investors posted an over-buying position of NT$5.4 billion during the session. Last Friday, the weighted share price index shot up 122 points from one day earlier to settle at 9105.28, which, in turn, rose 0.82 percent of 73.65 points from the level of 9031.63 posted a week earlier. Over the past week, cement shares recorded the highest rally of 13.17 percent, while the tourism sector posted the largest drop of 3.24 percent. Market statistics also indicated that aggregate turnover recorded over the past week came to NT$571.747 billion, with the overall stock turnover rate standing at 2.51 percent. Of the various stock categories, semiconductor took the lead with NT$121.17 billion in terms of the weekly turnover, accounting for 21.51 percent of the aggregate turnover. Optoelectronics came second with NT$57.604 billion or 10.23 percent, and financial and insurance took third place with NT$53.163 billion or 9.44 percent.

In terms of the turnover rate, biotech shares led with 7.3 percent, followed by 6.31 percent for foodstuffs, and 5.37 percent for chemicals.

Meanwhile, statistics compiled by the Taiwan Stock Exchange indicated that as of Sept. 21, the aggregate market values of all shares listed on the local bourse came to NT$22.703 trillion, representing an increase of 0.83 percent or NT$186.541 billion over a week earlier.

Of various share categories, cement stocks saw their total market values post the highest growth of 13.17 percent or NT$40.592 billion over a week earlier to reach NT$348.858 billion as of Sept. 21.

By contrast, tourism shares suffered the largest drop of 3.24 percent or NT$1.472 billion in terms of market values, reaching NT$43.937 billion.

The same tallies also showed that over a total of 178 trading sessions seen since the beginning of the year, the aggregate turnover of the local bourse has amounted to NT$24.111 trillion, translating into an average daily trading volume of NT$133.845 billion. Meanwhile, the turnover rate of the listed shares stood at 120.72 percent, translating into an average turnover rate of 0.68 percent in the past 178 trading sessions of this year.