Taiex index braces for fall after touching 7-year high
Taiwan's best-performing fund expects index to decline after surge in foreign inflows and sharpest first-quarter economic growth since 2012
Taiwan's best-performing equities fund is bracing for stock market declines over the next two months after the biggest foreign inflows in Asia this year sent the benchmark index to a seven-year high.
The market's Taiex Index would probably fall about 300 points by the end of next month, or 3.1 per cent from yesterday's close, before resuming its rally, said Shen Chien-hung, whose US$51 million Taishin 2000 High Technology Equity Fund returned 28 per cent this year.
The fund would probably pare positions in some semiconductor makers while buying Apple suppliers after the market retreated, he said.
"We may sell some stocks which had gained too much, and some chip stocks, and replace them with Apple-related stocks," said Shen, whose fund posted this year's biggest gain among 82 Taiwan peers tracked by Bloomberg with at least US$50 million in assets.
He favours shares of Largan Precision, MediaTek and Taiwan Semiconductor Manufacturing.
The Taiex has risen 10.6 per cent this year, twice as much as the MSCI Emerging Markets Index, after Taiwan's economy expanded at the fastest pace since 2012 in the first quarter and exports climbed for a fourth straight month in May.