Taiwan has overtaken China as the market with the top weighting in a key emerging-markets stock index for the first time in about two decades, driven by a rally in artificial intelligence (AI) shares.
The Asian chipmaking hub accounts for 21.06 percent of the MSCI Emerging Markets Index, squeaking past China’s 20.93 percent at the end of last month. It marks the first time Taiwan has surpassed China since July 2007, according to data compiled by Bloomberg. MSCI has not replied to a request for comment.
Taiwan’s rise highlights the popularity of AI-related trades and the importance of local companies in the industry, in contrast with China’s two-speed economy being weighed down by weak consumer demand. Taiwan Semiconductor Manufacturing Co is the single biggest weighted stock in the EM gauge, and has climbed about 13 percent this year.
Photo: Bloomberg
It “shows how dominant the AI theme has become,” said Joshua Crabb, head of Asia-Pacific equities at asset manager Robeco. “It underscores increasing interest in the laggard plays in Asia AI given better valuations.”
MSCI’s Taiwan Index rose more than 11 percent in January, compared with a 5 percent gain in the MSCI China benchmark.
While Chinese stocks remain cheaper than Taiwan’s in earnings-based valuations, Taiwan’s MSCI index is expected to deliver earnings growth of 37 percent in the next 12 months, compared with 15 percent for the China gauge, according to data compiled by Bloomberg.
Citigroup Inc strategists upgraded Taiwan equities to overweight from neutral in December, citing their exposure to global AI supply chains and a more favorable earnings outlook. By contrast, the bank downgraded China to neutral from overweight on weaker earnings and a subdued macroeconomic outlook, strategists — including David Groman — wrote in a Dec. 22 report.
Another Asian semiconductor hub, South Korea, has moved past India to become the third-largest market by weighting in the emerging-markets benchmark. Surging memory chip prices have propelled shares of Korean chipmaker giants Samsung Electronics Co and SK Hynix Inc to new highs.
While India’s structural growth story continues to attract investors, its limited exposure to high-end technology has constrained its upside in an AI-driven rally.
“While this enhances Taiwan’s strategic relevance in global portfolios, it also heightens exposure to potential downturns in the global technology or AI cycle,” said Gary Tan, a fund manager at Allspring Global Investments.
South Korea’s equity benchmark yesterday crossed a new milestone just a month after surpassing the once-unthinkable 5,000 mark as surging global memory demand powers the country’s biggest chipmakers. The KOSPI advanced as much as 2.6 percent to a record 6,123, with Samsung Electronics Co and SK Hynix Inc each gaining more than 2 percent. With the benchmark now up 45 percent this year, South Korea’s stock market capitalization has also moved past France’s, following last month’s overtaking of Germany’s. Long overlooked by foreign funds, despite being undervalued, South Korean stocks have now emerged as clear winners in the global market. The so-called “artificial intelligence
CONFUSION: Taiwan, Japan and other big exporters are cautiously monitoring the situation, while analysts said more Trump responses ate likely after his loss in court US trading partners in Asia started weighing fresh uncertainties yesterday after President Donald Trump vowed to impose a new tariff on imports, hours after the Supreme Court struck down many of the sweeping levies he used to launch a global trade war. The court’s ruling invalidated a number of tariffs that the Trump administration had imposed on Asian export powerhouses from China and South Korea to Japan and Taiwan, the world’s largest chip maker and a key player in tech supply chains. Within hours, Trump said he would impose a new 10 percent duty on US imports from all countries starting on
Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) latest AI model, set to be released as soon as next week, was trained on Nvidia Corp’s most advanced AI chip, the Blackwell, a senior official of US President Donald Trump’s administration said on Monday, in what could represent a violation of US export controls. The US believes DeepSeek will remove the technical indicators that might reveal its use of American AI chips, the official said, adding that the Blackwells are likely clustered at its data center in Inner Mongolia, an autonomous region of China. The person declined to say how the US government received
Like many of us who are mindful of our plastic consumption, Beth Gardiner would take her own bags to the supermarket and be annoyed whenever she forgot to do so. Out without her refillable bottle, she would avoid buying bottled water. “Here I am, in my own little life, worrying about that and trying to use less plastic,” she says. Then she read an article in this newspaper, just over eight years ago, and discovered that fossil fuel companies had plowed more than US$180 billion into plastic plants in the US since 2010. “It was a kick in the teeth,” Gardiner
RSS