After Taiwan’s stocks were oversold by foreign capital last time (2022), will there be a chance for capital to come back this year? In this regard, Peter Kurz, a QIC strategist known as “Mr. Taiwan”, believes that Taiwan’s stocks are currently showing signs of a bubble and that the search and judgment index could fall below 12,000 points, or even 11,000 points may not be ruled out, but after falling below 10,000, it can be considered a long-term buy point, waiting for an opportunity to make a deal.
Kuanliang International (QIC) today (11th) held its Q1 2023 investment outlook briefing. Regarding Taiwan’s stock performance this year, Gu Yuehan believes the US Federal Reserve’s goal is to maintain the inflation rate below 2%. Given the situation, the Federal Reserve will continue to maintain a tight monetary policy in the first quarter of this year, which will also affect the performance of the stock market.
Gu Yuehan said that the Federal Reserve is estimated to maintain tight monetary policy in the first quarter. In addition to achieving its target of a sub-2% inflation rate, current Federal Reserve Chairman Jerome Powell also acknowledges that the former President Volcker has a strong influence on inflation. The practice of cutting interest rates immediately after the interest rate cooled caused the inflation rate to rise again, and eventually forced interest rates to rise again, and the policy rate after the rate hike was even higher than the previous first rate hike.
Gu Yuehan explained that continued tightening by the Federal Reserve will cause the US dollar to continue to raise interest rates, which in turn will cause depreciation pressures on emerging market currencies, which will also increase the risk of high-risk economies. debt such as Latin America, emerging Eastern Europe and Southeast Asia. Under such circumstances, Taiwan, which has relatively good corporate and government financial ratios, will become a safe haven for funds and boost the market outlook for equities of Taiwan.
However, Gu Yuehan also said that after Taiwan’s stock surge in the past two years, there are signs of a bubble at present, so it will take time to correct; For every eventuality; however, Taiwan stocks have the advantage of low corporate debt and are more resilient than other stock markets.
As for whether foreign capital has the opportunity to hedge Taiwan’s stock this year? Gu Yuehan pointed out that foreign investors not only sold Taiwan stocks last year, but also outsold European and American stock markets. In the past, foreign investors mainly turned to large companies when buying shares of Taiwan, such as TSMC (2330-TW), MediaTek (2454-TW) etc. Therefore, the return on foreign capital depends on the performance of TSMC.
However, it should be noted that as long as TSMC increases capital investment, its profit margin will be small in the initial stage. In addition, the market has experienced a large shortage of chips in the past two years, but usually there will be an excess of supply after shortage Expectations include earnings performance and Chip supply will become the focus of foreign investment surveys.
As for the investment goals, Gu Yuehan believes that in addition to the heavy weight stocks preferred by foreign investors, the financial sector has problems such as strict supervision, insufficient capital and insufficient profits for foreign investors. As for biotechnology stocks, it is difficult to attract foreign investors.
