Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Taiwan Stocks Suddenly Among Asia’s Best Trades This Year

Stock MarketsNov 01, 2019 12:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

(Bloomberg) -- Taiwan stocks can cinch their best year in a decade as long as foreign investors keep piling in.

Outside money, fueled by an easing of U.S.-China trade tensions, has helped boost Taiwan asset prices. The Taiex gauge rose 4.9% in October, its biggest monthly gain since 2012. The Taiwan dollar has strengthened to levels not seen since mid-2018.

The key for the gains has been overseas investors buying about $3.1 billion of Taiwan Semiconductor Manufacturing Co. shares, or nearly half of the total equity inflows. Those purchases have helped the Taiex extend its gain this year to 17% at 11,350 as of Friday morning trading.

Allan Lin, assistant vice president at Concord Securities, predicts the index will close 2019 at a minimum of 11,800.

“Foreign investors will continue to invest in emerging markets including Taiwan stocks if U.S.-China trade talks remain positive,” he said. “Inflows into Taiwan are also seen increasing with foreign firms’ direct investment and repatriated funds due to tax breaks, which will continue to support Taiwan dollar strength.”

Lin predicted the Taiex would close 2018 at 10,500 in a Bloomberg survey a year ago. His forecast was the closest among market watchers to the actual level of 9,727.41.

Foreign investors have poured $6.6 billion into Taiwan-listed equities year-to-date, the most among Asian markets tracked by Bloomberg after India.

On top of that, billions of Taiwan dollars are flowing into the economy after lawmakers earlier this year passed a regulation providing tax breaks for companies and individuals that repatriate assets held overseas. Meanwhile, Google parent Alphabet (NASDAQ:GOOGL) Inc. and wind power company Orsted have recently won government approval to invest billions in local projects.

The island’s economy may give investors another reason to be bullish. It expanded at a 2.91% pace in the third quarter, the statistics bureau said Thursday, higher than the 2.45% median estimate of 20 economists surveyed by Bloomberg.

To be sure, further gains by Taiwan’s markets depend on how trade talks between the world’s two largest economies pan out. President Donald Trump’s plan to sign the first part of a deal with Chinese President Xi Jinping this month has been thrown into question after Chile canceled a summit where the two leaders planned to meet.

Michael Every, head of Asia financial markets research at Rabobank in Hong Kong and the most accurate Taiwan dollar forecaster for last quarter, said he was “generally bearish” on the local currency’s outlook due to concern about U.S.-China relations. The Taiwan dollar weakened 0.1% in early Friday trading as Chinese officials are casting doubts about reaching a comprehensive long-term trade deal with the U.S. even as the two sides get close to signing a phase-one agreement.

“With the optimism we’ve seen in the market,” said Every, “when negative fundamentals emerge, which is possible by year-end, investors may overreact.”

(Updates prices in third and 11th paragraphs)

Taiwan Stocks Suddenly Among Asia’s Best Trades This Year

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Jason Zou
Jason Zou Nov 01, 2019 1:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They think their business would boom in the ashes of trade wars, pity.
David David
David9 Nov 01, 2019 12:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Taiwan a d China are the same thing, so the title can be changed to companies in these part of China did pretty well compare to another part of China.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email