Investors should trim their holdings in Taiwan as local stocks have outpaced the economy and are relatively expensive compared with other Asian shares, UBS said yesterday.
The global investment bank said it was maintaining its forecast of a 4.5 percent contraction for the Taiwanese economy this year amid falling external demand and sluggish domestic consumption.
Kevin Hsiao (蕭正義), head of UBS Wealth Management Research Taiwan, said he was cautious about the short-term outlook of the local equity market but was upbeat about its long-term prospect.
“Investors should adjust their portfolio and cut down holdings in local shares that have rallied” ahead of an economic recovery, Hsiao told a media briefing.
Hsiao advised caution before the “world economy displays stronger signs of an improvement.”
The estimated price to earnings ratio for Taiwanese-listed firms has reached 40.2x — far higher than Hong Kong’s 18.2x, South Korea’s 14.7x and Singapore’s 15.5x.
Estimated price to earnings ratios for China and India — whose economies are predicted to post growth this year thanks to domestic demand — are also lower at 14.3x and 16.6x respectively, UBS data showed.
Pu Yong-hao (浦永灝), head of UBS Asian Research, said he was not surprised at the ongoing market corrections across Asia following the strong rebound in the first half of the year.
Pu advised investors to take profit and prospective entrants to stay on the sidelines.
“I recommend the strategy not because the global economy will suffer another decline but because it will not get significantly better anytime soon,” Pu said in a statement.
Both analysts expect Taiwan to benefit from warming cross-strait ties, which they said could spur a GDP growth of 2 percent next year.
While China’s stimulus package helps, true recovery hinges on a revival of demand in the US and Europe, Hsiao said.
Hsiao forecast that the local currency would trade at its current level against the greenback for the rest of the year.
Pu said slumping exports and market adjustments would also limit changes in the value of most Asian currencies.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
Chinese entrepreneur Frank Gao used to spend long hours running his social media accounts but now outsources the chore to artificial intelligence (AI) agent tool OpenClaw, which is taking China by storm despite official warnings over cybersecurity. OpenClaw, created in November by an Austrian coder, differs from bots such as ChatGPT because it can execute real-life tasks such as sending e-mails, organizing files or even booking flight tickets. “Since January, I’ve spent hours on the lobster every day,” Gao said in an interview, referring to OpenClaw’s red crustacean mascot. “We’re family.” After downloading OpenClaw, users connect it to artificial intelligence models of their
RSS