Yongfeng Gold is optimistic about the performance of Taiwan stocks next year. It is estimated that the high point of 16,600 points will appear in the fourth quarter (photo by reporter Wang Menglun)

[Reporter Wang Menglun/Taipei Report] Yongfeng Financial Holdings held the 2023 Investment Outlook Conference today. Yongfeng Financial said that next year will be a year of clearing the clouds and will usher in "three dawns", including: inflation cooling, economic bottom and Stop raising interest rates. It is estimated that the stock market will bottom out in the first quarter of next year, and corporate profits will gradually enter the right track. The peak in the fourth quarter is 16,600 points.

Taiwan stocks fell 251.86 points today, and the index closed at 14728.88 points, a little further away from the 10,000-5 mark.

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However, looking forward to the stock market next year, SinoPac is optimistic, emphasizing that "there is no right to be optimistic about the prosperity" in 2023, but "there is no reason to be pessimistic about the stock market."

In this regard, Huang Yinji, Chief Economist of Yongfeng Gold, said that next year there will be three dawns ABC, dawn A is inflation cooling (Inflation Abates), the price of raw materials will fall back to the pre-war level in Russia and Ukraine, and reduce the pressure of energy and food price increases; The bottleneck in the global supply chain has improved significantly, and some commodity prices have begun to fall; inflation is expected to cool down in an orderly manner in 2023, and Taiwan's CPI has returned to below 2% since 2Q.

Dawn B is the economic bottom (Economy Bottoms Out).

Taiwan's external demand is affected by the deceleration of growth in major economies and the slowdown in terminal demand. The momentum of exports in the first half of the year was sluggish. In the second half of the year, as the industry completes destocking and the global economy recovers, exports are expected to recover.

Domestic demand has benefited from the post-epidemic recovery and the opening of borders. The increase in Chinese people's willingness to travel has driven consumption and has become the main driving force supporting the economy. It is estimated to grow by 2.56% in 2023.

Dawn C is to stop raising interest rates (Rate Hikes Cease). The interest rates of major central banks have reached restrictive levels. Considering the impact of policies on the economy, there is a lag. It is expected that the Fed and ECB will end the cycle of raising interest rates in 1Q next year. Global monetary policy is uncertain It will be significantly reduced, which will help promote financing activities in the household and business sectors, and the financial market is expected to stabilize.

Inflation in Taiwan will fall below 2% next year, and the central bank is expected to stay on hold throughout the year.

"If you have a stock, don't sell it. If you don't have a stock, you can wait." Huang Yinji said, because Taiwan's stock market has reached the bottom of the evaluation, and the dividend yield is high, making the stock price bullish. It is estimated that the market index will be the lowest in the first quarter and the highest in the fourth quarter next year. In the quarter, the range looks at 13,200 to 16,600 points, an increase of up to 25%.

In terms of stock selection, Huang Yinji said that the main theme of the electronics industry in 2022 is to eliminate inventory, and the inventory adjustment pressure of Handset, NB, and DT products may continue until 1H23. The main axis of investment in 2023 will benefit from the trend of high-speed transmission, electric vehicles, and automotive computerization. Low inventory supply chains such as Server and Auto.

In addition, as the chip manufacturing process continues to shrink to 3nm, the long-term AI trend is not bearish, which is beneficial for the IP group to continue to attack.

In addition, 5G business opportunities are expected to expand to terminal applications after the infrastructure is gradually popularized, driving the rise of demand for IOT, industrialization 4.0, and AR/VR, and also ushering in business opportunities for industries such as inspection, IPC, and lenses.

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