Taiwanese Equities Outshine Peer Markets

Taiwanese Equities Outshine Peer Markets

Even with lackluster GDP growth in the 1%-to-2% range, Taipei-traded equities have held up impressively. The broad market index delivered a 15% dollar-based return in 2016, based on data from MSCI. A key reason is the economic dividend afford by a lower oil price; the island imports its entire hydrocarbon requirement. Taiwan-based companies are also benefitting from accelerating global demand for internet-related devices, both on a primary and outsourced basis. Among other points, Taiwan is a major player in the iPhone supply chain. We expect that East Asian investors will be cautious over the months ahead. They will take a wait-and-see approach to any potential trans-Pacific trade war between Beijing and Washington, trying to understand the impact on Taipei. There may not be enough growth cushion in the economy to withstand those pressures.

Learn more at the South China Morning Post.

© 2017 Cranganore Inc. All rights reserved.

Image shows detail at Chiang Kai-Shek Memorial Hall, Taipei. Credit: Perseo8888 at Can Stock Photo Inc.