《TAIPEI TIMES》 Stock market overtakes India, now fifth-largest

A smartphone displays Taiwan Semiconductor Manufacturing Co’s logo in front of an electronic stock board in Taipei on April 14. Photo: Tien Yu-hua, Taipei Times

/ Bloomberg Taiwan on Monday overtook India in stock market value, powered mainly by a breakneck rally in the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co （TSMC, 台積電）.

Taiwan’s market capitalization climbed to US$4.95 trillion as of Monday, data compiled by Bloomberg showed. India’s value has dropped to US$4.92 trillion. Taiwan’s stock market is now the fifth-largest in the world, behind only the US, China, Japan and Hong Kong.

Taiwan’s ascent up the global equity rankings is largely driven by TSMC, which now accounts for about 42 percent of the benchmark TAIEX, representing intense market concentration. The chipmaker’s shares have rallied 49 percent this year as it has benefited from the artificial intelligence （AI） boom, in which its semiconductors have a dominant market position.

The surge in the nation’s market value highlights intense optimism in AI that is triggering a global rally in technology shares, disproportionately benefiting manufacturing hubs such as Taiwan and South Korea. On the other hand, India is grappling with surging energy costs, slowing corporate earnings growth and the lack of companies directly linked to the AI buildout.

“Taiwan’s rising market capitalization is fundamentally a reflection of its heavy concentration in tech hardware, which is currently at the center of the AI investment cycle,” Franklin Templeton fund manager Yi Ping Liao （廖亦平） said. “Markets with limited exposure to tech hardware are increasingly being overshadowed by tech hardware-heavy markets such as Taiwan and [South] Korea.”

New regulations are also in TSMC’s favor. The nation’s financial regulator last month increased the limit that domestic funds can invest in a single stock. Under the new guidelines, funds that invest solely in Taiwanese stocks can hold up to 25 percent of their net assets in any listed company whose weighting exceeds 10 percent in the TAIEX, up from a previous limit of 10 percent. Only TSMC meets the criteria.

The change might help lure in more than US$6 billion of inflows to Taiwan, JPMorgan Chase & Co said in a research note.

While Taiwan has overtaken in market value India’s US$4.15 trillion economy — among the fastest growing in the world — it still trumps Taiwan’s US$977 billion GDP, according to IMF estimates.

Indian stocks have fallen this year amid record foreign outflows, driven by elevated valuations and a weakening rupee. Higher energy costs have also stoked inflation concerns and clouded growth prospects.

Global funds have sold about US$24 billion of Indian equities so far this year as they chased the AI boom in Taiwan and South Korea. India’s gauge is down 8 percent, heading for its first annual drop after a decade of gains. India’s weight in the MSCI Emerging Markets Index has also fallen to about 12 percent from 19 percent last year.

新聞來源：TAIPEI TIMES