(Bloomberg) -- Taiwan’s success in retaking a slice of the global technology supply chain amid the trade war is paying off for investors, with its equity benchmark ending a day over 12,000 points for the first time since 1990.
Like Japan, Taiwan saw a bubble in its equities burst three decades ago, and it’s been a long walk back. But unlike Japan, Taiwan has in recent years gone from strength to strength with its manufacturing -- which now accounts for about one-third of its economy, up from a quarter around the turn of the millennium, according to Gavekal Research.
The Taiex gauge rose 1.3% to close Tuesday at 12,097.01, taking its gain for the year to 24%. It’s on pace for the biggest annual gain since the rebound from the global financial crisis a decade ago. Taiwan’s dollar is also climbing, near its highest level against the greenback since June 2018.
Yet further gains could be in store, with a bout of potential political risk around next month’s presidential election creating an opening to buy Taiwan’s stocks, analyst Vincent Tsui of Gavekal wrote in a note last month.
Gavekal cited a recent uptick in export orders for electronic products and rising sales by semiconductor companies as reasons for optimism. Taiwan’s three biggest semi firms saw combined revenue jump 19% in the third quarter, compared to the previous period, to a record $10.8 billion, the researchers said.
Taiwan Semiconductor Manufacturing Co., the world’s largest supplier of made-to-order chips, reported sales climbed 9.7% year-on-year last month, versus a 4.4% gain in October. TSMC, which accounts for nearly one-quarter of the Taiex’s weighting, added 2.7% on Tuesday, extending its record high.
Meantime, Taiwan’s economy was showing signs of resilience even before China and the U.S. reached their phase-one trade deal on Friday. Exports rose 3.3% on-year last month, the fastest pace since October 2018, a rebound the government attributed to global demand for integrated circuits and firms moving production back home. Taiwan earlier raised its economic forecasts for this year and 2020.
The Taiwan dollar was last up 0.4% at 30.16.
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