The construction sector experienced a significant rise today (2nd), with both Shyang Yao (1316) and Lianshang (2537) hitting their upper limits, capturing market attention. However, analyst Wu Yueh-Chan from Asia Securities warns that while this surge is related to expectations of interest rate cuts, the underlying speculative nature remains high, making sustainability questionable.

According to reports from Yahoo! Finance, Wu explains that due to widespread market expectations for the Federal Reserve to initiate a rate-cutting cycle, coupled with a 0.3% annualized contraction in the U.S. GDP for the first quarter and a negative economic outlook, funds are beginning to shift towards asset-based stocks. Taiwan's monetary policy is highly interconnected with the U.S., increasing the likelihood of rate cuts, with the New Taiwan Dollar also showing strength, resulting in a relatively relaxed monetary environment that further boosts interest in asset and construction stocks.

In this bullish atmosphere, Shyang Yao (1316) opened at 14.70 NTD and reached its upper limit of 16.05 NTD during the session. In March, Shyang Yao reported revenues of 310 million NTD, marking a 233.2% year-on-year increase and a 24.5% month-on-month increase, maintaining year-on-year growth for 13 consecutive months. Lianshang (2537) also performed strongly today, reaching its upper limit at 11.65 NTD.

However, Wu emphasizes that these types of stocks have a strong short-term speculative nature, particularly Shyang Yao as a southern developer, which, while driven by the potential of the Southern Science Park, exhibits considerable volatility and high risks. Investors should set stop-loss points cautiously to avoid being trapped by high prices. For those interested in Southern Science Park themes, he advises considering more conservative options like Huayu Lian (1436), or financially sound companies like Huagu (2548) and Changhong (5534).