After the Taiwan Stock Exchange reached the peak of the band on April 27 (9,973 points), it finally lost to the weak trend of emerging markets and global bond markets, and has pulled back nearly 3% so far. However, Barron`s.com, a well-known American financial website, believes that Taiwanese manufacturers are increasingly relying on Apple Inc., so they are less affected by weak global economic growth. The recent pullback of the Taiwan stock market has also given investors a chance to get a bargain.
Barong senior columnist Wayne Arnold wrote an article on the 21st that Taiwan's exports account for 60% of the gross domestic production (GDP), and investors also regard the Taiwan stock market as a representative of the Asian export industry. Therefore, after the US economic outlook improved and Europe followed Japan's move to the faucet of quantitative easing monetary policy (QE), the Taiwan stock market has also become the target for everyone to rush. From January to April this year, global investors bought a total of US$3.4 billion in Taiwan stocks. However, in the environment of global growth and export activities still weak, the Taiwan Stock Exchange continued to rise, which made some investors stagnate and led to the Taiwan Stock Exchange pullback.
However, Arnold believes that although Taiwan's manufacturing industry has supplied the global technology industry's needs in the past, it has gradually shifted its focus to the technology giant Apple Inc. in recent years, so the boom and fuse of the global electronics boom has also had a relatively low impact on Taiwan. The confrontation between Apple and Samsung Electronics Co. has prompted the company to hand over more iPhone and iPad orders to Taiwanese operators such as Hon Hai, TSMC, Dali Guang, and Delta.
Apple is in excellent condition at present. The company's revenue jumped 27% from the same period last quarter (January-March) compared with the same period last year, and the revenue in Greater China jumped 71%, completely unthreatened by economic fatigue. Hon Hai's revenue in the first quarter also grew by nearly 15%. Judging from these signs, the Taiwan Stock Exchange is still very cheap at present, with a P/E ratio of only 14.5 times, far lower than the historical average. According to Bloomberg statistics, the dividend yield rate of Taiwan stocks is about 3% on average.
Arnold also wrote an article to recommend investors to buy the Taiwan Stock Exchange on November 14 last year, while the Taiwan Stock Exchange closed at 8,982.88 points on the same day, still 6.63% lower than the closing on May 21 (9,578.56 points).
Taiwan and South Korean stock markets are both regarded as thermometers for the United States by foreign capital. barron`s.com reported on May 15 that the current P/E ratio of the MSCI South Korea Index is 9.9 times, 8.5% higher than the long-term average. However, the current P/E ratio (12.8 times) of the MSCI Taiwan Index is 9% lower than the historical average.
(This article is reproduced by authorized by MoneyDJ News; first image source: Flickr/Peter Alfred HessCC BY 2.0)
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