Market Trend

Between August 11, 2008 to August 22, 2008, the MCI index plunged from 6210.6 to 5912.2, down by 298.5 points. Although the index fell past the 6000 level, reaching the “very low confidence level” of WitsView’s new MCI confidence scale, this is expected to be only temporary. In the near future, the index should bounce back to the above 6000 level. Given the panel makers’ production cutbacks, and low-priced sales promotion in the end market, the panel demand should improve more evidently after August, thereby giving a boost to the market confidence. Moreover, after falling sharply in July and August, panel prices should also grow more stable after August. The main concern is how strong the panel market can be stimulated. With the macroeconomic woes still present, it remains to be seen how serious it will weigh on the forthcoming demand. Given the various viewpoints on the future trend, the outlook remains quite uncertain. One important signal to observe is how the MCI index changes over the next two months. Needless to say, if any evident rebound is to be seen, the index will have to at least return to the above 6500 level.