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Where Are the Opportunities in Emerging Markets Today? (Part2)

In the first part of the article, we looked at one of the best-performing markets this year, India. In Part 2 of the article, we will take a closer look at Taiwan market.

Patricia Oey 28 November, 2014 | 10:47

Taiwan is the world's largest supplier of contract computer-chip manufacturing services and is a major producer of LCD panels, DRAM computer memory, networking equipment, and consumer electronics. These technology companies account for a significant portion of Taiwan’s economic output, and Taiwan-focused funds tend to have an average 50% weighting in the tech sector. The outlook for these tech companies is healthy. Gartner, in its latest worldwide devices forecast, said that it expects personal computers to grow at a low-single-digit rate over the next few years, driven by a refresh cycle. This is a reversal from the declines seen in recent years as PCs lost market share to tablets and mobile phones. Tablet unit sales are expected to continue rising, albeit slower than the 11% growth rate in 2014, and demand for mobile phones is expected to grow about 5% in 2015. We also note that some of Taiwan’s largest tech companies, such as Taiwan Semiconductor (TSM) and Hon Hai, are key players in Apple’s (AAPL) supply chain. In its fourth-quarter results, Apple said it is still seeing significant backlog for its new iPhones and expects strong sales in China. On the domestic front, the macroeconomic environment in Taiwan is stable. Manufacturing data remains positive, unemployment is falling, and Moody’s said in August that the outlook for Taiwan’s banking system remains stable.

Examples of Taiwan Equity funds available for sale in Hong Kong

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About Author

Patricia Oey  Patricia Oey is an ETF analyst at Morningstar.

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