Morning News &Views -Asia:A Summary of Select Global Markets Research

TAIEX: 17% YTD return, atop 10,000, last seen in April 2000. On 8 Dec 2016, we forecast a 2017 target of 10,068on the TAIEX (2017 outlook). It has only taken five months to get there. YTD, the TAIEX has been firing on all threecylinders: 1) global trade recovery since 2H2016 and improving outlook on US trade policies; 2) three iPhone 8models planned for the fall; 3) capital inflow to EM assets benefited the TAIEX: TWD241bn YTD, led by ETFs tookforeign ownership in the TAIEX to an all-time record of 41.3% and expanded valuation multiples for the indexheavyweights. Raising EPS growth slightly for CY2017, in line with consensus. We raise slightly our 2017F TAIEXEPS growth from 11.7% to 16.1% y-y on Nomura forecasts. This reflects a 2.5% upward revision for FY17 EPS and1.3% lower in the 2016 EPS base. Consensus EPS estimates also rose 2.4%, thanks to upgrades at iPhonecomponent makers and upstream energy/material names.