Equity investors in Taiwan earned an average of NT$558,300 (US$20,155) in the Year of the Ox after the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), soared almost 12 percent in the year under the Chinese calendar.
The Taiex on the main board closed at 17,674.40 on Wednesday, the last trading session for the Year of the Ox, up 1,872 points or 11.84 percent from Feb. 5, 2021, the last trading session for the previous year — the Year of the Rat.
During the Year of the Ox, the market capitalization of the main board rose by NT$6.7 trillion to NT$48.2 trillion.
Based on the 12 million investors who have a trading account, investors earned an average of NT$558,300 during the year, the TWSE’s data showed.
After a dip in the market during the middle of 2021 due to an outbreak of domestically transmitted COVID-19 cases in mid-May, the local equity market gradually moved higher.
The Taiex closed at a new high of 18,526.35 on Jan. 4 and hit a historic intraday high of 18,619.61 on Jan. 5, largely because of buying sparked by optimism over the business outlook of Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker based on its efforts to develop high-end processes and expand production capacity, dealers said.
TSMC, shipping stocks
TSMC, the most heavily weighted stock on the local market, reached an historical intraday high of NT$688.00 on Jan. 17 after bouncing back from a low of NT$518.00 on May 12, 2021 for the Year of the Ox.
The strong showing by TSMC in the first part of January came after the chipmaker gave positive leads at an investor conference on Jan. 13, indicating the company’s capital expenditure will range from US$40-US$44 billion in 2022, up from US$30 billion in 2021, to meet strong global demand.
The Taiex started to give up part of its earlier gains in the year in the second part of January 2022 as the local bellwether electronics sector encountered headwinds after a spike in the benchmark U.S. 10-year treasury yield amid growing concerns over a rate hike by the Federal Reserve.
TSMC closed at NT$636.00 on Wednesday, coming off its historical intraday high on Jan. 17.
In addition, the Taiex was also boosted by strong interest in shipping stocks at a time when freight rates kept growing on the back of rising demand for container cargo shipping and port congestion worldwide, dealers said.
During the year, Yang Ming Marine Transport Corp. recorded the highest growth of 358.6 percent among all the stocks listed on the main board.
Lunar New Year holiday
The local equity market will be closed from Jan. 27 to Feb. 6 to observe the Lunar New Year holiday before trading resumes on Feb. 7, the first trading session in the Year of the Tiger.
With the long holiday approaching, many investors took to the sidelines, sending turnover lower as they feared negative leads could emerge overseas during the holiday.
Finance Minister Su Jain-rong (???) told reporters that the National Stabilization Fund will watch closely how global stock markets move during the New Year holiday, adding if necessary the stabilization fund’s commission will call a meeting after the holiday to come up with measures to help the local equity market lower overseas impacts.
The NT$500 billion stabilization fund was set up in 2000 by the government to serve as a buffer against unexpected external factors that might disrupt the local bourse.
Uncertainty faced by the global financial markets comes from fears that the Fed could raise interest rates four times later this year and cut its balance sheet as well as geopolitical tensions between Ukraine and Russia, Su said.
Trying to calm investors, Su said the fundamentals of the local equity market remain sound as Taiwan’s economy continues to grow on the back of a strong export performance, rising 30 percent in 2021.
Source: Focus Taiwan News Channel