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Bloomberg
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Taiwan overtook the UK in stock market value as the country’s tech firms regained favor amid hopes for further de-escalation in the Iran war.
Taiwan’s market capitalization rose to US$4.14 trillion as of Wednesday, making it the world’s seventh-largest, according to data compiled by Bloomberg that show the combined value of companies with a primary listing in the nation.
The UK’s market was valued at about US$4.09 trillion.
A man looks toward an electronic stock board at the Taiwan Stock Exchange in Taipei yesterday.
Photo: CNA
The feat comes after the TAIEX recouped losses driven by the Iran war — one of the first major markets to do so — to reach a record high.
Taiwan Semiconductor Manufacturing Co (台積電) also renewed its all-time high, buoyed by revenue growth that underscores its key role in the global artificial intelligence (AI) supply chain.
“Taiwan continues to be treated as an AI hardware proxy,” Broadridge Financial Solutions Inc’s APAC growth solutions head Yoon Ng said. “As long as AI capex momentum holds, flows should remain supportive.”
While the size of Taiwan’s US$977 billion economy trails the UK’s US$4.3 trillion, according to IMF estimates, roaring exports of AI-related products is boosting growth expectations for the nation.
The TAIEX has risen 17 percent so far this month. It gained 1.12 percent yesterday, extending its rally to an eighth straight session — the longest winning streak since last year.
Foreigners have bought a net US$10.3 billion of Taiwanese shares so far this month, putting the market on track for its biggest monthly inflow ever after a record US$28.7 billion outflow last month.
Meanwhile, the UK’s FTSE 100 Index has gained less than 4 percent so far this month, amid lingering concerns over sticky inflation and interest rates that are higher than in the rest of Europe.
Still, equities in the UK are drawing investors amid geopolitical uncertainty, boosted by a significant exposure to the energy and defensive sectors.
A flurry of strategists, including at Barclays PLC, Citigroup Inc and HSBC Holdings PLC, are favoring the FTSE 100 either as a geopolitical hedge or as a preferred exposure in the current environment.
“The commodity-based sectors of energy and basic materials, which could benefit from elevated energy and metal prices, represent nearly one-fifth of the UK market cap,” HSBC strategists including Duncan Toms said. “In 2022, the UK stood out as one of the best markets in a backdrop of global stagflation.”
A Bank of America Corp survey this month showed the UK was the second-most favored market in Europe after Switzerland, a similar position to last month’s survey.
It was the second least-preferred in February.
Still, a net 16 percent of global fund managers are underweight on British stocks compared with 15 percent last month.
