The World is revolutionizing so is Taiwan…
Excessively undervalued
Sources: Bloomberg, Polaris Securities
The P/E ratio of Taiwan is lower than many countries over the world, especially compare with China. Many quality companies are undervalued for a long time. A focus on the domestic economy and the possibility of breakthroughs on China will lead to Taiwan being one of the best performing equity markets in Asia since the US hit its market peak in Jul07. It might be a bumpy ride, but the longer-term trend is up.
Improved cross-strait relationship
A 72% KMT majority in Taiwan’s Legislative Yuan and a KMT President come May 20th mean that change is on the agenda with an expansionary economic policy domestically, a more relaxed China policy. The improved political atmospherics should help facilitate a more constructive dialogue between Taiwan and China on many economics cooperation issues. Taiwan will act as the core and integrate Global and China business opportunities.
Components of the Taiwan Weighted Index
Sources: Bloomberg, Polaris Securities
- Electronic Industry：Be the core of the electronic manufacturing over the world. There are several household names, such as Acer, Asus, and HTC etc.
- Financial Industry：Banks, Securities, and Insurance are included. The blue chips are Cathay Financial Holdings, Fubon, and Chinatrust…etc.
- Others：Such as Plastic Industry(i.e. Formasa Plastic Group), Steely Industry(i.e. China Steel), and Food Industry(i.e. Uni-President).