6.5% today.
How much tomorrow?
It’s probably a good time to buy a few stocks.
Any ideas about how low it’s gonna go?
It’s probably a little to early to tell because we won’t be able to get a solution to the election problem for a few days, a week…who knows?
But if it gets sorted out soon, I would think things would start moving up quickly as big investors get back into the market.
Ski
I would say that we are headed for 6,000 which could be reached by today or by tomorrow. Then a rebound, when it becomes clear that the roof is not falling down.
The bottom might be forming, as the index is not dropping like a stone, but seem to have found some support.
Start buying, you might make a quick buck. 
That support is called the National Stability Fund.
If they are tho only ones doing the buying, I suspect that they will run out of money sometime tomorrow. The turnover soo far today is NT$106bn, and they only have NT$500bn.
Other actors are in as well, the foreigners bought net yesterday (they own 15%+ of the market), the relatively small prop traders group (1% of market wonership) is likely to treat this a technical drop - and they are very short-term in nature, and the investment trusts will not let any chance for a quick buck pass them by (3-4% of the market, but more long-term than the props).
The people doing the selling are the individual investors (70% of the market), and they are also doing most of the buying.
If you actually look at a TAIEX systex main screen, you will see that there are more unfilled buy orders in the system than unfilled sell orders, the buy orders are likely to be placed at limit-down prices. There’s therefore no overhang of unexecuted sell orders, which would be negative in deed. if the govt went in, they would be buying like crazy, not just at limit-down prices
Therefore stop rambling about the government and look at the figures instead.Please!
Mr. He, do you own stocks? I wonder which ones you are buying?
fwiw, got this in my e-mail last night. Emphasis is mine.[quote=“ING-Barings’s Tim Condon”]…
Markets reacted even worse than when President Chen was elected in March 2000. Taiwan’s stock market, the Taiex, lost 450 points or nearly 7%, with most blue chips down by their 7% trading limit. Stock futures were suggesting the market had at least one and possibly two more limit-down days. Foreigners, however, were net buyers of Taiwanese stocks to the tune of TWD 7.5bn. TWD came under intense pressure but market players said CBC was intervening heavily.
We are sceptical that the political shock will be sufficient to derail what is the most favourable economic outlook in many years. Strong economic fundamentals have contributed to the Taiex being the world’s sixth best-performing equity market this year - until today. The economy is poised to grow by 5-6% this year, which would be the best performance since 1997.
…[/quote]
Mr He, this is gold you’re giving us. Where do you get such information? i.e. what various groups % ownership of the market is, who brought in (QFIs v’s locals) and what the number of buy and sell orders are in the system.
Also what sectors are driving today’s rally, coz it sure ain’t my stocks
Gee, thanks. I did this for a living, working in brokerage for 30 months, the last 8 of those in the Proprietary trading department. My job thru the most of my time in the brokerage was to watch the market and look at the stats we are discussing (called market dynamic indicators).
Well, when it comes to how many are buying and/or selling:
tw.stock.yahoo.com/s/tse.html?
It’s in chinese. There is a box in the lower right corner. there are 3 figures above the box. The first one is number of buy orders (and average box order size is in red beside it), the second is number of unfilled sell orders (white figure on the side), and the last is number of trades. (Green figure is average trade size.)
The 3 figures above those are the same figures in number of orders submitted, with the figure right below the percentage in the upper left half is the total turnover, which is very big today.
the lower right square in the box on the lower left side of the screen shows gainers (red), losers (white), and unchanged stocks (green) Look at the figures to the left, as that is number of companies.
the huge turnover is a big plus, some people are still selling, but others are taking their positions. some of the selling is margin related, where people who have borowed money to buy stocks have been forced to liquidate, a phenomena, which usually adds force to a market downturn. others are ppl, who took short positions before the election, and who’s pocketing their gains (short= you borrow some stocks from your broker, sell them, and wait for them to fall, whereafter yu will give the stocks back and pocked the difference).
Percentage ownership, I worked in a stock brokerage breaking down and analyzing those figures for 21/2 years, so I know them by heart. They have changed a bit, as the foreigners are buying more, and the retail investors are getting smaller, but that takes place over time.
The figures on actual ownership are publicized monthly, but you an extrapolate a rough figure by using the net buy/sell of the different groups.
A good web site with many of the figures is that of the stock exchange:
they have the daily net buys and sells.
I think that the percentage ownership figures by different groups are from the ministry of finance, but I obviously had access to a huge database with lots of historical figures back when I worked in finance. They are of somewhat less interest on a day to day basis, though.
I don’t regret leaving the securities industry.
Thanks for the insights Mr. He. I appreciate you sharing your knowledge with us rookies. Thanks again.
Anyone watching right now? Are we heading for tumble?
I don’t own stocks, however, once I can afford it I will buy.
The stock market rose 140 points from 10 AM to 11 AM. It’s retreating now, as some punters are taking a quick gain, and others on the selling side uses the rise to unload more.There are still 300,000 more buy orders out than there are sell orders, so the market will turn up, once it falls to the levels, where the buy orders are placed (If you want to know that, then go down to the nearest brokerage and comandeer a systex terminal, which will show exactly number of buy and sell orders per stock and at what price they are placed).
It’s stabilizing now. Remember, that a rise or a fall is hardly ever a straight line. There are small pullbacks when it rises and small rises when it falls. you will have to rely on the stats, your general outlook on the market and you experience when determining what the general market direction is.
Mr He, I assume you worked for a foreign brockage, so maybe you know, would an overseas fund manager aggressively buy into the TAIEX in the present circumstances, I always assumed these guys were more causious, especailly given the TAIEX’s status.
Which leads me on to: FTSE decide tomorrow if they will change the status of the TAIEX to “developed” is there any chance the TAIEX will be upgraded in the midst of the current upheaval?
(I went down to the new Presidential Palace night market and campsite last night, those nut-jobs could be there for a while)
And if I may indulge your goodwill still further: since there is such speculation on the TAIEX how accurately do the share prices reflect the fundamentals of the company? (Feck all corporate transparency in a nation of gamblers)
Also, i was looking at P/E ratios last week and it looked like there was a massive bubble, yet everyone still says the TAIEX is set for further growth. So how much have investor’s expectations already been priced into the index?
Thank you (should you choose to answer!)
Some will buy on the dips, ssoe won’t. The assumption that they will sit on the sides, while the market finds its bottom is a good one - today they sold NT$19bn, which is very high. If there is an assumption that the current troubles will last for some time, then everybody will run for the door. The buyers today was the retail investors.
The current situation will have an influence on the FTSE decision, but it’s ahrd to say if they will change the status of the market, there are still many restrictions in place for foreign buyers.
Corporate transparency and Taiwan??? The figures are usually predictive for bigger companies and sectors consolidated up, however not for IC design houses and the like (Mediatek 2454 sold for a p/book near 10 at one point, and yesterday’s star VIA 2388 sold for the same multiples in late 1999). The “logical” PE of say 10~14 is a illusion. I would buy stocks going for 100 times earnings, and hive them off, once the PE fell to 20. But a good PE can be made to order by a decent accountant, especially here, but also in most other markets. I would look at free cash flow instead, but that’s just me.
If everybody says that there is room for growth and that things are getting better and better, then beware. The news are priced in. Everything will be priced in. A good proxy for Taiwan’s IT sector is INTC btw. Also look at semiconductor equipment bookings, once the change in the rate of change turns negative, it’s time to sell.
Cheers Mr He, everything you said makes sense but where do it get information like the amount of semiconductor equipment ordered? I work in the industry so I have a fair idea of where the shortages and oversupply is (BTW cronic SDRAM shortage right now) but no hard figures.
Also what is INTC, a stock code?
SIA (Semiconductor industry association)had figures on total sale of semiconductors on their web site 1 year ago.
My memory is failing me, try to type: semiconductor equipment book to bill ratio into google.
There is also SEMI, which is for the semiconductor-making equipment industry.
INTC is Intel’s stock code.