In November, foreign investors are poised to inject significant capital into Taiwan stocks, marking a record-setting net inflow of $8.2 billion, according to a report by Bloomberg on Thursday.
This surge, the largest monthly inflow since at least 2000, is attributed to increasing optimism surrounding technology shares, driven by the belief that the Federal Reserve has completed its interest-rate hikes.
The Taiwan Stock Exchange (TWSE) Index has witnessed an impressive 8.6% surge in November, positioning itself as one of the top-performing indices in the Asia Pacific region. This rally reflects a global trend as investors reassess tech valuations amid expectations of a peak in borrowing costs.
Caroline Yu Maurer, Head of China and Specialised Asia Strategies at HSBC Asset Management, emphasized the close correlation between Taiwan’s market and the U.S. cycle, particularly the AI-related cycle. She noted that Taiwan’s leading stocks do not exhibit extreme valuations, making it an attractive proposition for investors. Maurer stated that Taiwan “is very much geared toward the US cycle, essentially the AI-related cycle. (The leading stocks) are not really extreme on valuations, they’re not as expensive.”
While Taiwan experiences this financial influx in its tech-heavy market, its neighbor, South Korea, also attracted substantial inflows totaling $3.1 billion. In contrast, Indian equities, despite becoming a structural bet for many foreigners, saw relatively lower popularity, gathering $614 million in inflows.
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