After Taiwan stocks were oversold by foreign capital last (2022), will there be a chance for capital to return this year? In this regard, Peter Kurz, a QIC strategist known as “Mr. Taiwan”, believes that Taiwan stocks are currently showing signs of a bubble, and the research and judgment index may fall below 12,000 points, or even 11,000 points may not be ruled out , but following falling below 10,000, it can be regarded as a long-term buying point, waiting for an opportunity to make a bargain.
Kuanliang International (QIC) held the first quarter 2023 investment outlook briefing today (11th). Regarding the trend of Taiwan stocks this year, Gu Yuehan believes that the goal of the US Federal Reserve is to keep the inflation rate below 2%. Looking at 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 it is estimated that the Federal Reserve will maintain a tight monetary policy in the first quarter. In addition to achieving the goal of an inflation rate of less than 2%, the current Federal Reserve Chairman Jerome Powell also recognizes that former Chairman Volcker has a strong influence on inflation. The practice of cutting interest rates immediately following the rate of interest rate cooling caused the inflation rate to rise once more, and finally forced to raise interest rates once more, and the policy rate following the rate hike was even higher than the first rate hike before.
Gu Yuehan explained that the Fed’s continued tightening will cause the U.S. dollar to continue to raise interest rates, which in turn will cause depreciation pressure on emerging market currencies, which will also increase the risks of highly leveraged economies such as Latin America, emerging Eastern Europe, and Southeast Asia. Under the circumstances, Taiwan, which has relatively good corporate and government financial reports, will become a safe haven for funds and become a boost to the market outlook for Taiwan stocks.
However, Gu Yuehan also said that following the surge in Taiwan stocks in the past two years, there are signs of a bubble at present, so it will take some time to correct; Just in case; 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 cover Taiwan stocks this year? Gu Yuehan pointed out that last year, foreign investors not only sold Taiwan stocks, but also sold more than European and American stock markets. In the past, foreign investors mainly targeted large-scale companies when buying Taiwan stocks, such as TSMC (2330-TW), MediaTek (2454-TW) etc. Therefore, whether foreign capital returns depends on the performance of TSMC.
However, it should be noted that as long as TSMC increases capital investment, its profit margin will be lowered at the initial stage. In addition, the market has experienced a large chip shortage in the past two years, but usually there will be an oversupply following the shortage. Expectations include profit performance and The supply of chips will become the focus of foreign investment investigation.
As for investment targets, Gu Yuehan believes that in addition to the large weight stocks preferred by foreign investors, the financial industry 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.
