Breakingviews - Taiwan is punching well above its market weight

Hudson Lockett - Reuters - 13/08
Taiwan's markets are not falling in line. The MSCI index comprised of Taiwanese stocks has dropped sharply in recent weeks but, unlike its peers in Japan and South Korea, has not come close to reversing its rise for 2024. Indeed, its year-to-date gains of nearly 28% are more than double those of the S&P 500 .
HONG KONG, Aug 12 (Reuters Breakingviews) - Taiwan's markets are not falling in line. The MSCI index (.MIWO00000PUS), opens new tab comprised of Taiwanese stocks has dropped sharply in recent weeks but, unlike its peers in Japan and South Korea, has not come close to reversing its rise for 2024. Indeed, its year-to-date gains of nearly 28% are more than double those of the S&P 500 (.SPX), opens new tab.
That is thanks in no small part to the $748 billion heavyweight Taiwan Semiconductor Manufacturing (TSMC) (2330.TW), opens new tab, which after an almost 60% rally this year accounts for just over half of the MSCI Taiwan (.MITW00000PTW), opens new tab and is larger than the entire economy. But it is hardly the only winner from demand for exposure to the AI-driven market frenzy. To name just one, shares in Hon Hai Precision Industry (2317.TW), opens new tab, weighted at 5% in the index, are up 62% this year.
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This represents a triumph of tangible profits over indeterminate risks. A Cross-Strait Risk Index compi...
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