Foreign investors are set to channel significant capital into Taiwan stocks in November, creating a record-setting inflow of $8.2 billion on a net basis, Bloomberg reported on Thursday.
This surge being the largest monthly inflow since at least 2000, is attributed to growing optimism surrounding technology shares, fuelled by the belief that the Federal Reserve has concluded its interest-rate hikes.
The Taiwan Stock Exchange (TWSE) Index has surged by an impressive 8.6 per cent in November, positioning itself as one of the top-performing indices in the Asia Pacific region. This rally aligns with a global trend as investors re-evaluate tech valuations amid expectations of a peak in borrowing costs.
Bloomberg cited Caroline Yu Maurer, Head of China and Specialised Asia Strategies at HSBC Asset Management, who emphasised 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, providing an attractive proposition for investors. Maurer remarked 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.”
As the tech-heavy market in Taiwan experiences this financial influx, its neighbour, South Korea, also attracted substantial inflows amounting to $3.1 billion. In contrast, Indian equities, while increasingly becoming a structural bet for many foreigners, saw relatively lower popularity, gathering $614 million in inflows.
