(From：Focus Taiwan 2013-09-07)
Taipei, Sept. 7 (CNA) Taiwans stock market is expected to steam ahead and get out of the current doldrums in the fourth quarter after it moved into consolidation mode for some time amid unfavorable external leads, a local fund manager said Saturday.
The local bourse has fluctuated in ranged trade in recent sessions, facing strong technical resistance at around 8,100-8,200 points amid concerns over a possible U.S. strike against Syria and a likely exit by the U.S. Federal Reserve from its monthly US$85 billion bond buying program.
Li Sui-jia, a fund manager with the Taishin 2000 High Technology Equity Fund, said despite recent consolidation, foreign institutional investors served as net buyers of local shares, paving the way for the local bourse to post gains in the fourth quarter with the help of ample liquidity.
On Friday, the weighted index on the Taiwan Stock Exchange closed down 0.05 percent at 8,164.20 points as the bellwether electronics sector took a breather from the gains posted a session earlier.
Li said foreign institutional investors had bought a net in the local bourse for seven trading sessions in a row, and could continue buying local shares as they expected to move more funds into Taiwan.
Since Aug. 29, when foreign institutional investors resumed buying in the local bourse, they have served as net buyers of NT$45.99 billion (US$1.54 billion) worth of local shares, according to statistics compiled by the TWSE.
Li said it seemed that investors had turned more upbeat about the local stock market performance as they had not only picked up bargains in the spot market but also cut their short positions in futures.
In addition, Li said, the amount of margin trade posted by retail investors remained at a relatively low level of around NT$180 billion, indicating that the local bourse had turned technically healthier and was ready to move higher in the near future.
The market is expected to rise higher on rotational buying, Li said, adding she expected buying would rotate to so-called “Apple concept stocks”, which are the suppliers to the U.S. consumer electronics giant, as investors have been upbeat over the likely launch later in the month of the new iPhone and iPad.
Li said she also preferred electric car component stocks on hopes that a plan by the worlds largest electric vehicle supplier Tesla Motors to launch new models would boost Taiwanese suppliers sales. Meanwhile biotech stocks could benefit from the governments policy to develop the industry, she said.
The fund manager said shares of touch panel makers, integrated circuit distributors and notebook computer manufacturers had fallen sharply in recent sessions and that this could attract bargain hunters to take advantage of their relatively low valuations.
(By Maranda Hsu and Frances Huang)
enditem/N. Jayaram