Analysis: Taiwan's Stock Market Outperformed All Others in Asia in 2024

TaiwanPlus News

Taiwan's main stock index, the Taiex, gained nearly 30% in 2024, outperforming all other Asian markets. TaiwanPlus spoke with Natixis economist Gary Ng about how AI fueled Taiwan's corporate growth and his outlook for 2025.

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00:00Taiwan's main stock index, the TAIX, gained nearly 30% in 2024, outperforming all other

00:06major Asian markets. The major growth is credited largely to investment in technologies

00:12used in artificial intelligence, especially semiconductors. 90% of the world's most advanced

00:18chips are made in Taiwan. South Korea's index saw the worst performance in the region, losing 8%.

00:25For more on Taiwan's market performance this year, reporter Chris Goran

00:31spoke with senior economist at the consultancy in Texas, Gary Ah.

00:37Taiwan's main stock index, the TAIX, gained more than 28% this year,

00:41outperforming all other markets in Asia. What do you chalk these major gains up to?

00:46Well, indeed, when you look at the performance of the Taiwanese equities market, it is not

00:52performing the best in the local currency in Asia. And even in USD terms, because other

00:59currencies have depreciated so much with the USD, that Taiwan dollar is also one of the most

01:05resilient ones. So I think the most important point is really about this very strong artificial

01:12intelligence boom that we actually see globally, not only in the US, but when you look at the

01:17supply chain, Taiwan is definitely one of the markets that is like the closest to all of these

01:24opportunities. So all of this has basically filled a prospect domestically that people

01:30are earning more money than before. So they are actually investing more on the local stock market

01:36as well. So I think all of these factors basically bring to the fact that, well,

01:42the momentum has actually been quite strong in Taiwan.

01:45Has this growth mostly been concentrated in a few companies,

01:49or has it been more evenly distributed across the economy?

01:53I think it's a very common phenomenon, especially after COVID that we do see across all the market

01:58that most of this gain are actually quite concentrated in some specific companies.

02:04And for the case of Taiwan, which is actually quite linked to the US as well,

02:08it's really about this very highly concentrated gain in the tech sector. And of course,

02:14some may argue that, well, it's true that there may be this Dutch disease,

02:18which basically means that one part of the economy is growing much faster than the others.

02:23But still, at least we managed to see some strong sectors in Taiwan, which is the tech sector.

02:29Obviously, there's a lot of factors that could impact the economy in the coming year,

02:33not the least of which being the incoming Trump administration in the United States

02:37and its potential tariffs. What's your outlook for Asia in 2025?

02:42Indeed, if you look at all this policy uncertainties, I do believe that the Trump

02:48administration and what he decided to do will be one of the biggest sources of volatility that we

02:56will see next year. But again, it doesn't necessarily mean everything is bad for Asia.

03:01The positive sign remains that I do not think the US can produce everything by itself. So even

03:09though there may be tariffs or et cetera, I mean, all the multinational companies in Asia,

03:15especially in the manufacturing sector, I'm sure they will find a way to actually

03:20mitigate such risks because either they need to bypass the tariff by investing in the US,

03:25et cetera. But for Taiwan, I don't think these factors will change the fundamental trend that

03:30the world needs more AI computing power, which basically means that chips will still be one of

03:35the most important commodities in the world. That will mean more corporate revenue for these

03:41companies.

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