Taipei, the capital of Taiwan, is lined with skyscrapers.
Ratima Sritanwong | iM | Getty Images
The Taiwan-weighted index hit an intraday high of 20,296 before paring gains, according to FactSet data. Paul Yu, chairman of First Securities Investment Corporation, said the number could reach 24,000 by the end of the year.
Global demand for AI has been strong over the past few months and remains “very promising,” You said. Asia-Pacific’s technology sector is expanding on the back of a semiconductor boom, even as other industries struggle amid global macro uncertainty.
Yu said this is setting the stage for an economic boom on the island, which boasts “the strongest supply chain for AI service manufacturing.”
I expect a very strong year from a stock market perspective and also with the expected Fed rate cuts.
Alicia Garcia-Herrero
Natixis Chief Economist for Asia Pacific
Chip giant TSMC, Nvidia’s main contract chip maker, has soared more than 30% so far this year, benefiting from Nvidia’s performance and potential. TSMC is the largest component of his Taiex.
Share prices of Taiwanese equipment assembly companies such as Quanta Computer and Wistron Corporation have also increased by more than 14% and 24%, respectively, this year, according to LSEG data.
Alicia García Herrero, chief economist for Asia Pacific at Natixis, said another reason for the rise in Taiwanese stocks is that increased fixed asset investment since the election in January has created uncertainty. said. She also said the AI boom will further accelerate the bull market.
“We expect it to be a very strong year from a stock market perspective and also with the expected Fed rate cuts,” he added.
Fed rate cuts typically provide a boost to stock markets because lower interest rates mean lower borrowing costs for businesses and individuals.
See chart…
Taiwan Stock Exchange hits new high
He also said that apart from the spotlight on superstar sectors such as semiconductors and AI, some domestic sectors such as Taiwan’s precision machinery, automation technology and consumer sectors remain undervalued.
He added that some rotation into these sectors may be needed to push the benchmark index towards all-time highs. Sector rotation involves moving funds from one industry to another in anticipation of the next stage of the economic cycle.
“So I’ll believe it if we do that.” [are] Once we reach 24,000, we will have to add sector rotation,” he said.
Goldman Sachs said in a recent note that despite the strong performance of the composite index, less than half of Taiwanese stocks have delivered positive returns since the beginning of the year, and Taiwan’s “market breadth is narrow.” Ta.
