Taiwan’s stock market valuation has surpassed that of India, primarily due to a rapid increase of Taiwan Semiconductor Manufacturing Company (TSMC), which is the largest chipmaker in the world.
According to media reports, the island nation’s market value increased to USD 4.95 trillion as of Monday. The value of India has decreased to USD 4.92 trillion.
Now, with this, Taiwan’s stock market is currently the fifth largest in the world after the US, mainland China, Japan and Hong Kong.
Interestingly, this development has stunned many, as India has much more listed companies in the stock market, bigger economy by scale and a population of more than 140 crore along with one of the fastest-growing retail investor bases in the world.
On the contrary, Taiwan is home to just 2.3 crore people. However, the foreign investors are increasingly investing in Taiwan, while pulling billions out from Indian stocks.
In addition, the unprecedented surge in TSMC and one of the main benefactors of the global AI boom, has been the primary driver of Taiwan’s upward trajectory. The fact that TSMC alone currently makes up almost 42 per cent of Taiwan’s benchmark stock index demonstrates how highly concentrated the market has become around a single business.
This year, TSMC’s stock has increased 49 per cent as the demand for AI processors has skyrocketed worldwide. Also, the company produces cutting-edge processors that are used by Qualcomm, Apple, Nvidia and Advanced Micro Devices.
Furthermore, the manufacturing centers like Taiwan and South Korea benefited disproportionately, as investors poured into semiconductor and AI-related stocks as artificial intelligence became the most popular global investment theme.
India, on the other hand, is struggling in an entirely different economic climate.
The country is currently facing a number of challenges, including rising energy costs, decreasing corporate earnings growth, persistent selling by foreign investors and the lack of listed companies directly associated with the global surge in AI infrastructure.
Also, at present, India does not have internationally significant listed semiconductor or AI hardware firms drawing significant foreign capital flows, in contrast to Taiwan.
Another primary reason behind Taiwan surpassing India has been continuous foreign investor withdrawals from Indian stock market. This year, billions of dollars have been taken out of Indian markets by foreign institutional investors (FIIs)
