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Taiwan Area: Taiwan stocks fell on Friday ahead amid worries about growth

2015/05/03

Taiwan stocks fell on Friday ahead amid worries about increase, particularly in its all-significant tech businesses. However, shares are likely to recover and continue a rally that has added 14% to the major index of the Taiwan Stock Exchange in the completed year, according to a statement last week by Nomura Securities. The index lost 33.78 points to 9,820.05 on Friday.

The index has been gaining in part on the performance of semiconductor and other tech shares that are benefiting from ties to Apple and spread of the Internet additional deeply into daily lives through connected appliances and other devices. Taiwan tech companies that have performed well include Taiwan Semiconductor Manufacturing, the chipmaker led by former Forbes Asia Businessman of the Year Morris Chang, whose shares have gained a quarter in the completed year.

Looking ahead, flat U.S. interest rates will lead international investors to search for yield in Taiwan, the Japanese brokerage predicted. Nomura recommends “late cycle” banking stocks such as Fubon Financial, led by billionaires Daniel and Richard Tsai, and Cathay Financial, led by their billionaire cousin Tsai Hong-tu. Nomura as well recommended financial services companies E.Sun and Mega. The current rally will lift the index to 10,239, at the same time as the market price-earnings ratio will be a projected 14.1 times, Nomura said.

Nomura’s “top reduce” is chip design home MediaTek, whose shares have by instantly lost a fifth of their price in the completed year. That company is led by Taiwan billionaire Tsai Ming-Kai.

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