〈The Pulse of Taiwan's Stock Market〉Post-May 20th Outlook: Trust Sectors and AI Companies Leading the Way
The Taiwan Stock Exchange's benchmark index surged an impressive 549 points last week to set a new record high, closing at 21258.47 points. This bullish momentum is bolstered by the reassuring comments from US Federal Reserve Chairman Jerome Powell, who reaffirmed that a cycle of rate cuts is looming. With the inauguration of the president on May 20, traders are focusing their attention on 'trustworthy' concept stocks, particularly those in key sectors. Additionally, the financial results announcement from Nvidia on May 22 is expected to significantly influence the large group of AI stocks.
Last week, the combined buying power of three major institutional investors pushed the total net purchase of Taiwan stocks to NT$1333 billion - a record high since February of the previous year. This marked four consecutive weeks of net buying. Foreign investors led these purchases, acquiring NT$1142 billion worth of shares. Key purchases included major stakes in Taiwan Semiconductor (2330-TW), Yang Ming (2609-TW), MediaTek (2454-TW), Quanta (2382-TW), Evergreen Marine (2603-TW), PharmaEssentia (6446-TW), Yuanta Taiwan 50 (0050-TW), Foxconn (2317-TW), Taiwan Optoelectronic (2383-TW), and Uni-President (1216-TW).
Traders anticipate that the upcoming week will be dominated by two major events: the May 20 inauguration of Republic of China's President Lai Ching-te, and Nvidia’s financial report on May 22. Lai's inauguration speech is expected to have a significant impact, potentially bolstering confidence in five major trusted industries, including AI, semiconductors, military defense, security, and telecommunications.
On the other hand, given the recent performance of US technology stocks following their financial disclosures, unless Nvidia's data significantly exceeds expectations, a wave of short-term selling pressure might emerge post-announcement. However, with the 2024 Taipei International Computer Exhibition set for June and Nvidia's CEO, Jensen Huang, confirming attendance - coupled with 2023 being labeled as the first year of the AI Processing Chip (APIC), long-term growth trends for the related supply chains appear strong.
YongFeng Investment Consultants have pointed to the latest US PPI and CPI data, which met expectations, and Powell's statements that rate hikes are unlikely, confirming the imminent start of a rate-cut cycle. This has spurred a sprint in US stocks, surpassing previous highs and, in turn, lifting Taiwan’s market.
Despite the strong advance in Taiwan's stock market and some short-term indicators showing signs of slowing, medium-term indicators have flipped to bullish signals, leaving the market outlook open-ended.
YongFeng also noted that with May marking the season of shareholder meetings followed by a period of intense dividends, companies like ChipMOS, Foxconn, and TSMC have significantly increased their dividends, aligning with the market's bullish intent. As these dynamics play out, the robust trading environment could present numerous opportunities for investors keen on 'trustworthy' industries and AI technology. Overall, the tailwinds for Taiwan's stock market seem poised to carry the momentum further, underscoring the themes of trust and technological advancement in the post-May 20th marketplace.
Last week, the combined buying power of three major institutional investors pushed the total net purchase of Taiwan stocks to NT$1333 billion - a record high since February of the previous year. This marked four consecutive weeks of net buying. Foreign investors led these purchases, acquiring NT$1142 billion worth of shares. Key purchases included major stakes in Taiwan Semiconductor (2330-TW), Yang Ming (2609-TW), MediaTek (2454-TW), Quanta (2382-TW), Evergreen Marine (2603-TW), PharmaEssentia (6446-TW), Yuanta Taiwan 50 (0050-TW), Foxconn (2317-TW), Taiwan Optoelectronic (2383-TW), and Uni-President (1216-TW).
Traders anticipate that the upcoming week will be dominated by two major events: the May 20 inauguration of Republic of China's President Lai Ching-te, and Nvidia’s financial report on May 22. Lai's inauguration speech is expected to have a significant impact, potentially bolstering confidence in five major trusted industries, including AI, semiconductors, military defense, security, and telecommunications.
On the other hand, given the recent performance of US technology stocks following their financial disclosures, unless Nvidia's data significantly exceeds expectations, a wave of short-term selling pressure might emerge post-announcement. However, with the 2024 Taipei International Computer Exhibition set for June and Nvidia's CEO, Jensen Huang, confirming attendance - coupled with 2023 being labeled as the first year of the AI Processing Chip (APIC), long-term growth trends for the related supply chains appear strong.
YongFeng Investment Consultants have pointed to the latest US PPI and CPI data, which met expectations, and Powell's statements that rate hikes are unlikely, confirming the imminent start of a rate-cut cycle. This has spurred a sprint in US stocks, surpassing previous highs and, in turn, lifting Taiwan’s market.
Despite the strong advance in Taiwan's stock market and some short-term indicators showing signs of slowing, medium-term indicators have flipped to bullish signals, leaving the market outlook open-ended.
YongFeng also noted that with May marking the season of shareholder meetings followed by a period of intense dividends, companies like ChipMOS, Foxconn, and TSMC have significantly increased their dividends, aligning with the market's bullish intent. As these dynamics play out, the robust trading environment could present numerous opportunities for investors keen on 'trustworthy' industries and AI technology. Overall, the tailwinds for Taiwan's stock market seem poised to carry the momentum further, underscoring the themes of trust and technological advancement in the post-May 20th marketplace.
Last edited at：2024/12/16
#TSMC#MediaTek Inc.#Evergreen Marine Corporation#0050-tw#Nvidia#Foxconn