In the past, when the US markets sneezes, Taiwan catches cold as the Taiwan Stock Exchange, like most Asian markets, follow the US technology-laden NASDAQ.
But this week when the NASDAQ crashed, the Taiwanese bourse defied gravity and went up instead. The benchmark index closed up by 47.81, or 0.9 percent, to 5,658.21 points yesterday -- thanks partly to the overnight recovery on the Wall Street.
One reason, analysts believe, is that the meltdown in Taiwan's stock market beginning last year has pushed the Taiwanese tech price close to historical lows.
"They are not right there at the bottom, but they are close [to historical lows]," said Camille Vergara, an analyst who covers the Taiwanese technology shares for Fortis Investment Management in Hong Kong.
For instance, she believes, that the Taiwan Semiconductor Manu-facturing Co (TSMC,
Thanks to the relatively low future earnings visibility, she believes that PBR -- which is a ratio of the company's share price compared to its net worth -- may be a more reliable measure of the stocks compared to the more common price-to-earnings ratios.
Sure, the technology sector will report disappointing earnings this year, but savvy investors buy stocks when "the market is at the bottom," said one analyst. Local technology shares are also much cheaper than their counterparts on the NASDAQ, analysts reckon.
Jerry Huang, an analyst with Deutsche Securities in Taipei, has calculated that Taiwan's technology stocks as a group are now trading at 22 times 2001 forward PE multiple versus 35 times for the NASDAQ.
"This means there is less downside for the local shares compared to NASDAQ," he said.
Economics are favorable too. With the monetary easing expected to have an effect on consumer demand within three to nine months, investors should expect some good news in the third quarter of this year.
"So it will not hurt to accumulate stocks at this level," Vergara said.
Valuations aside, improving domestic confidence may also be partly responsible for the recent recovery in the local shares. Some leading economists already believe that domestic economic growth -- which decelerated sharply beginning last year -- could rebound in the second half.
Since Taiwan's economy slowed before the US, analysts reason that it may also recover earlier.
"The reason why we believe there may be a sharp rebound in Taiwan in the second half is because there is the confidence factor -- if a rebound occurs, it could be quite sharp as well," Joan Zheng (
Vergara prefers Hon Hai Precision Industries (
"But it is still too early to try to go into downstream component sectors, which will still suffer from the declining growth in personal computer demand," said a local analyst from a fund management house.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last