Taiwan’s markets are chugging ahead
Taiwan’s (EWT) equity markets has been raging of late. The country’s benchmark index- Taiex Index recently touched the 10,000 mark for the first time in 17 years since the peak of the dot-com bubble. Taiwan has also outperformed the MSCI’s emerging markets index and is up 7.7% YTD on a bullish outlook for the global technology sector. Taiwan is the third largest member of the MSCI emerging market Index. Despite Taiwan’s latest rally, the Taiex Index still trades in the lower range of valuations in the past 10 years. As per a report by Bloomberg, Taiwan is Asia’s most attractive investment destination for foreign investors in 2017. The country has attracted $7.3 billion of foreign inflows in 2017 so far.
Manishi Raychaudhuri of BNP Paribas shared a bullish outlook on Taiwan in a recent interview. “I would think this deluge of money can continue in the medium term.”
The Taiwanese economy grew 2.9% in Q4 2016, its best performance in two years. The country is primarily export driven with a focus on technology driven products. Rising demand for tech-based products by global companies is driving demand for suppliers of tech components based in Taiwan.
Some analysts believe Taiwan is not just about the tech sector. They are also bullish on oil refiners and the financial sector. With yields slated to rise, analysts are expecting better profitability for financial stocks with a possibility of widening net interest margins.