Don’t ignore Taiwan
China’s domestic market is trundling along nicely. Oil giant Petrochina made its debut in Shanghai this week – and promptly trebled in value, becoming the first company in the world to be valued at over $1trn, more than Exxon Mobil and General Electric combined.
This is despite a lacklustre earnings outlook and the fact that Warren Buffett, who recently warned that Chinese share prices have risen too fast, has sold out of the group.
All the fuss over China has distracted attention from Taiwan. Yet it looks appealing, reckons John Christy on Breakingviews. A Credit Suisse study notes that stocks rose by 18% and 11% in the six months before the last two presidential elections, only to slide or flatline afterwards as optimism over big changes ebbs.
So history implies an uptick before March’s presidential vote; with the ruling party’s candidate promising to “make nice with the mainland”, voters and investors “will have something to be optimistic about”.
Taiwan is also heavily exposed to two major global growth engines: technology and China. Nor are valuations over the top – the market is on a p/e of 15 for this year, according to Bloomberg.
