TAIEX to bottom out in Q1: investment chiefs

The China Post news staff

Up to 66 percent of chief investment officers or market research chiefs at 36 domestic securities investment trust and consulting firms shared the view that the Taiwan stock exchange market would bottom out by the end of the first quarter this year, according to findings of a survey released yesterday by the Securities Investment Trust & Consulting Association of the R.O.C. The survey was carried out in the form of a questionnaire sent to investment and market research chiefs at member firms of the association, to learn their forecasts on global economic and investment outlooks in 2012.

The survey showed that close to 70 percent of the respondents noted that the global economic growth will decline slightly in 2012, and that stock markets around the world would suffer should the European debt crisis worsen further in the year.

Over 80 percent of the respondents agreed that the European debt crisis will be the largest variable to affect the global investment markets.

But they showed polarized views about whether the crisis would worsen or ease in 2012, with 39 percent saying the crisis would worsen further and 36.11 percent saying the crisis would ease slightly — a demonstration of the uncertainty for the development of the European debt crisis.

Up to 78 percent of the respondents forecast Taiwan’s economic growth for 2012 would drop slightly from 4.54 percent in 2011.

Some 66 percent of those polled forecast the local bourse to bottom out in the first quarter, and 55 percent predicted the year’s peak of the local bourse will appear in the fourth quarter, indicating that the local bourse will gradually turn around since the second quarter.

In addition, 38.8 percent expected listed shares of traditional industry to enjoy lucrative showing this year, and 36.11 percent anticipated electronics shares to perform better.

A further breakdown indicated that 78 percent of the surveyed shared the view that of traditional shares, foodstuff stocks will perform the best in the new year, followed by 53 percent for department stores, and 33 percent for tourism and leisure-related shares. In terms of electronics shares, 56 percent said that mobile phones will remain the mainstream category to see better performance, compared to 47 percent for IC shares. On another front, 56 percent of the surveyed predicted the U.S. economic growth will decline slightly in 2012 from 2011, but up to 81 percent of chief investment officers polled said they would prioritize additional investments in the U.S. stock markets.

As to whether the U.S. Federal Reserve will launch the third round of quantitative easing, called QE3, to stimulate the U.S. economy in 2012, 64 percent of the respondents said that the Fed is likely to enforce the QE3 this year, given the reality that the U.S. central bank announced at its last interest rate meeting in 2011 that the low-interest policy will last into the middle of 2013.

When it comes to developing markets, around 80 percent of the polled opined that China’s economic expansion will decline slightly in 2012 but will remain higher any other developing country, making China the No. 1 choice for their increased investments, followed by India and Indonesia. In terms of merchandise, as much as 86 percent of chief investment officers surveyed said that agricultural products will remain the most promising sector for investment.

With regard to the fluctuations of crude oil and gold prices, 64 percent opined that international crude oil prices will fluctuate between US$86 and US$100 per barrel, and only 31 percent expected the prices to surge to the range of US$101 and US$120. Meanwhile, 69 percent said that international gold prices will fluctuate between US$1,701 and US$1,900 per ounce, and 14 percent noted that the prices will fall under US$1,700 per ounce.