Top-Ranked UBS Foresees Caution on Taiwan in First Quarter
By Weiyi Lim - Jan 5, 2012
Investors will be cautious on Taiwanese equities in the first quarter because of Europe’s debt crisis and uncertainty over election results, said William Dong, UBS AG’s head of Taiwan equities.
Taiwan’s stocks (TWSE) are linked to Europe through the island’s export industry, Dong, whose bank was ranked first for Taiwan research in 2011 by Institutional Investor magazine, said in an interview with Bloomberg Television today. Investors will be watching the results of a Jan. 14 election to gauge the outlook for China-Taiwan relations, he said.
“It’s difficult to have a lot of surprise on the upside for the whole year,” Dong said. “The market will remain somewhat resilient, but the upside could be not as much as what some people expect.”
The benchmark Taiex Index (TWSE) slumped 21 percent last year, the most since 2008, as the worsening European debt crisis and the prospect of slowing global economic growth raised concern of a decline in Taiwanese exports. Orders for the island’s exports (TWEOTTLY)increased in November at the slowest pace in more than two years, government data on Dec. 20 showed.
Data today are expected to show European consumer confidence slumped to the lowest in more than two years in December, while retail sales in the region fell in November, according to the median forecasts in Bloomberg surveys of economists.
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