By Ko Lin
The overall monitoring indicator for Taiwan’s economic performance flashed a blue light for the third-consecutive month in September, according to the Cabinet-level Council for Economic Planning and Development (CEPD) on Sunday.
The CEPD created a five-color rating system to gauge the performance of the nation’s economic situation. A red light indicates an overheated economy, a yellow-red light means the economy is getting heated, a green light signals stable economic expansion, a yellow-blue shows an economic slowdown, and a blue light refers to economic recession.
Meanwhile, Allianz Global Investors has trimmed positions in local shares on expectations of extended corrections caused by the slump in the semiconductor sector, Taipei-based fund manager Hsu Yen-chuan said.
The investment division of Allianz SE, the German multinational financial service provider, ranks among the top five global active investment managers.
“The uncertainties surrounding the United States Federal Bank’s rate hike and inventory adjustment in the semiconductor industry will hamper stock trading, and that stocks will fluctuate in line with the economy for the remaining quarter,” Hsu said.
JihSun Securities’ Fund Manager Zhao Xian-cheng believes capital investment funds will remain in emerging markets for the next two months, as investors are expecting a raise in the Fed’s interest rates.
“Although the surplus of semiconductor inventory has yet to be adjusted, the Taiwan stock index will remain stable amid the economic slowdown,” he said, adding that it is expected to hover between 8,000 to 8,500 points for the remaining quarter.
According to foreign institutional investors, Taiwan’s stock market has reached near the bottom and is likely to rebound.
Asia-based overseas investors believe the market will gain momentum as the iPhone 6S makes its way to market for the remainder of 2015.
As the semiconductor industry continues to deal with inventory adjustment, Zhao suggested investors pick out new entrants in the traditional manufacturing sector.
“Shoemaking contractors for Nike are seen to post growths in the foreseeable future, as new technologies are being incorporated into the sports and recreation industry,” he concluded.