Jim Rogers, cofounder with George Soros of the Quantum Hedge Fund, is investing in Taiwan on expectations that this week's presidential election will install a government that will improve ties with China.
Rogers, 65, said he recently bought exchange-traded funds tied to Taiwan, predicting the two economies would "merge" and that the NT dollar would be boosted by appreciation in the yuan.
Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (
"Both of them are going to bring peace," Rogers, chairman of Rogers Holdings, said in an interview with Bloomberg Television on Wednesday in Singapore.
"It's ultimately going to be a merger of Taiwan and China. The currencies are going to merge. The economies are going to merge," he said.
The NT dollar has risen 5.5 percent this year, while the benchmark TAIEX index gained 5.6 percent in the past month as Ma and Hsieh promised to expand travel and investment ties should they win the March 22 vote.
The TAIEX advanced 1.9 percent to 8,337.62 by the 1:30pm close in Taipei. The NT dollar gained 0.1 percent to NT$30.692. Taiwan's local currency bonds have returned 1.6 percent this year, HSBC Holdings Plc index said.
Taiwan's currency has been the worst performer in Asia outside of Japan in the past three years as economic growth slowed to an average 4.09 percent annually since 2000 from 6.48 percent over the previous eight years.
"As soon as the market opens, I will be buying some more Taiwan," Rogers said in the interview late on Wednesday.
"We'll see if it's an overlooked trade or not. I haven't heard many people talking about Taiwan in 15 to 18 years," he said.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
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