Taiwan’s success in retaking a slice of the global technology supply chain amid a US-China trade dispute is paying off for investors, with the TAIEX yesterday closing above 12,000 points for the first time since 1990.
Like Japan, Taiwan saw a bubble in its equities burst three decades ago and it has been a long walk back.
However, unlike Japan, Taiwan has in the past several years gone from strength to strength with its manufacturing — which now accounts for about one-third of its economy, up from one-fourth at about the turn of the millennium, Gavekal Research said.
Photo: CNA
The TAIEX yesterday rose 1.32 percent to close at 12,097.01, taking its gain for the year to 24 percent. It is on pace for its biggest annual gain since a rebound from the global financial crisis a decade ago.
The New Taiwan dollar is also climbing, near its highest level against the greenback since June last year. Yet, further gains could be in store, with a bout of potential political risks related to the presidential and legislative elections on Jan. 11 creating an opening to buy Taiwanese equities, Gavekal analyst Vincent Tsui (徐天佑) wrote in a note last month.
Gavekal cited an uptick in export orders for electronic products and rising sales by semiconductor firms as reasons for optimism.
The nation’s three biggest semiconductor firms saw combined revenue jump 19 percent quarter-on-quarter in the third quarter to a record US$10.8 billion, the research firm said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest supplier of made-to-order chips and accounting for nearly one-fourth of the TAIEX’s weighting, yesterday added 2.58 percent to close at NT$345, extending its record high.
Led by TSMC and its sound fundamentals, the bellwether electronics sector anchored the broader market, while non-technology stocks were mixed.
Formosa Plastics Corp (台塑) gained 2.38 percent to NT$99.1 and food brand Uni-President Enterprises Corp (統一企業) added 0.41 percent to NT$72.56, while Fubon Financial Holding Co (富邦金控) lost 0.21 percent to NT$46.5.
The TAIEX was spurred by the record highs set by the Dow Jones Industrial Average and the NASDAQ index overnight after Washington and Beijing agreed to a “phase one” deal to resolve their trade dispute.
Turnover yesterday totaled NT$154.775 billion (US$5.12 billion), compared with NT$144.85 billion on Monday, indicating a greater willingness to trade, dealers said.
The positive leads in global trade have seen foreign institutional investors move funds into the region, boosting regional currencies including the New Taiwan dollar, which yesterday rose NT$0.053, or 0.18 percent, to close at NT$30.210 against the US dollar.
Additional reporting by CNA
CHIP WAR: Tariffs on Taiwanese chips would prompt companies to move their factories, but not necessarily to the US, unleashing a ‘global cross-sector tariff war’ US President Donald Trump would “shoot himself in the foot” if he follows through on his recent pledge to impose higher tariffs on Taiwanese and other foreign semiconductors entering the US, analysts said. Trump’s plans to raise tariffs on chips manufactured in Taiwan to as high as 100 percent would backfire, macroeconomist Henry Wu (吳嘉隆) said. He would “shoot himself in the foot,” Wu said on Saturday, as such economic measures would lead Taiwanese chip suppliers to pass on additional costs to their US clients and consumers, and ultimately cause another wave of inflation. Trump has claimed that Taiwan took up to
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SUPPORT: The government said it would help firms deal with supply disruptions, after Trump signed orders imposing tariffs of 25 percent on imports from Canada and Mexico The government pledged to help companies with operations in Mexico, such as iPhone assembler Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), shift production lines and investment if needed to deal with higher US tariffs. The Ministry of Economic Affairs yesterday announced measures to help local firms cope with the US tariff increases on Canada, Mexico, China and other potential areas. The ministry said that it would establish an investment and trade service center in the US to help Taiwanese firms assess the investment environment in different US states, plan supply chain relocation strategies and
Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Japanese Minister of Finance Katsunobu Kato said. “We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said yesterday in an interview with Fuji Television. Japan is very concerned about how the tariffs might impact the global economy, he added. Kato spoke as nations and firms brace for potential repercussions after Trump unleashed the first salvo of