Citing relatively low foreign equity holdings and the sharp plunge in the won, Merrill Lynch said in a recent report that it favored South Korea over Taiwan.
The global investment bank also forecast that Taiwanese exports, which focus on electronics, would plunge 50 percent in the coming months because of the US slowdown. Since the Taiwanese stock market is about 50 percent tech-heavy, Merrill Lynch said it would underweight Taiwan.
Despite its overall bearish outlook on Taiwan, Michael Hartnett, Merrill Lynch’s global emerging markets equity strategist, said it was more important to pick individual companies based on their management, product and balance sheet.
Speaking in a Merrill Lynch live Webcast yesterday, Harnett said: “In 2005, anyone could pick a country ETF [exchange traded fund] outside the US and do pretty well; but going forward, the key is to pick good companies as opposed to countries, and in essence differentiate the boys from the men.”
Even with Merrill Lynch’s country pick of South Korea over Taiwan, the more important thing would be to choose good companies that are going to “gain global market share,” Hartnett said.
INTERNAL DEMAND
With the US economy, Harnett said he believed that Asian economic growth would shift from external to internal demand. Thus, big-name Asian consumer firms topped his list.
Hartnett and his team have an “overweight” rating in telecommunications in Taiwan, Japan, China, India, South Korea and Singapore. They also advised overweighting banks in India, Australia and Hong Kong, but not China and Singapore.
The Merrill Lynch team recommended underweighting technology in most countries, Hartnett said.
The emerging markets expert also recommended the BRIC countries — Brazil, Russia, India and China. Although macroeconomic conditions are deteriorating in these countries, Hartnett said that in terms of scale on each nation’s GDP, “a recession in China simply isn’t the same as a recession in the US.”
BENEFICIARIES
Hence, Hartnett said that if a global recovery were to take shape and investor appetite for equities returns, the BRIC countries would be the first to reap the benefits.
Among the BRIC countries, Harnett favored China over India. One reason is that he expects China to be a major center for deregulation in the coming years, spurring growth in multiple areas.
Chinese equities also currently trade at a discount to developed markets, the country has enormous excess savings as evidenced by its massive current account surplus and Chinese consumers are unconstrained by debt, he said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would not produce its most advanced technologies in the US next year, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the comment during an appearance at the legislature, hours after the chipmaker announced that it would invest an additional US$100 billion to expand its manufacturing operations in the US. Asked by Taiwan People’s Party Legislator-at-large Chang Chi-kai (張啟楷) if TSMC would allow its most advanced technologies, the yet-to-be-released 2-nanometer and 1.6-nanometer processes, to go to the US in the near term, Kuo denied it. TSMC recently opened its first US factory, which produces 4-nanometer
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
PROBE CONTINUES: Those accused falsely represented that the chips would not be transferred to a person other than the authorized end users, court papers said Singapore charged three men with fraud in a case local media have linked to the movement of Nvidia’s advanced chips from the city-state to Chinese artificial intelligence (AI) firm DeepSeek (深度求索). The US is investigating if DeepSeek, the Chinese company whose AI model’s performance rocked the tech world in January, has been using US chips that are not allowed to be shipped to China, Reuters reported earlier. The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation, amid concerns that organized AI chip smuggling to China has been tracked out of nations such
RSS