Index Plunges as AI Capex Concerns Heat Up
Taiwan stocks recently faced dual pressures from global financial market volatility and a valuation correction in technology shares, with the weighted index closing down 1,156 points at 45,211 on October 30, a drop of 2.49%. Concerns over the payoff from massive capital spending on the artificial intelligence industry have risen, as investors reassess whether huge corporate capex can translate into actual profits, intensifying market volatility.
Eight Defensive Picks with TECO and Grand Glass as Featured Stars
Cheng Tong Investment Advisory analyst Ye Liang-chao finished 2nd in Hole 5 of the Commercial Times Taiwan stock competition, with a single-week return of 0.08%. Looking to his Hole 6 deployment, he continues to uphold the principle of capital preservation first, profits second, selecting 8 stocks including TECO, Grand Glass, Far Eastern Department Stores, CMC Magnetics, Sunplus Technology, China Steel, Silicon Integrated Systems and Silergy-KY, spanning electrical machinery, glass processing, department-store retail, electronic products, IC design, steel, and power management.
The electromechanical giant China Electric machinery maker TECO accounts for 13.8%, one of this week's featured picks, with businesses covering motors, air conditioners, power and energy, and data centers, and steady profit growth. The other featured pick, Grand Glass, accounts for 13.4%, mainly engaged in optoelectronic and electronic glass processing, with price rebound potential and operational improvement as key watch points. Far Eastern Department Stores accounts for 13.3%, focused on department stores and shopping-mall channels. CMC Magnetics accounts for 12.5%, with business mainly in optical discs and related electronic products, plus holdings of financial assets.
Remaining Six Allocations Across Traditional and Electronics Sectors
Sunplus Technology accounts for 12.4%, covering multimedia, imaging and consumer-electronics chips. China Steel accounts for 12.3%, with products used in construction, automotive and machinery industries, with a subsequent recovery in business conditions still to be observed. Silicon Integrated Systems accounts for 12.2%, covering logic ICs and related semiconductor technologies. Silergy-KY accounts for 10%, specializing in power-management ICs for consumer electronics, industrial and automotive markets.
Preservation First, Keeping Cash and Flexibility
Facing market volatility, Ye Liang-chao stressed that investors should not rush to predict the bottom, nor assume cheap buying opportunities simply because share prices have fallen consecutively. Operationally, investors should watch whether the index can stabilize, whether foreign investors stop heavy net selling, and whether individual companies' revenues, profits and cash flows remain solid. The more violent the market swings, the calmer one must stay. Defense is the priority for now, picking stocks not trends, and preserving cash and operational flexibility is the most important strategy at this stage.