The Taiwan Monthly

Jun. 2021

Global Connection

Strong economic fundamentals intact, Taiwan capital market in good order

As the number of confirmed Covid cases rise domestically, the Taiwan Stock Exchange (TWSE) would like to give an update on the recent circumstances, as well as reassure global investors that the Taiwan capital market is running smoothly.


Taiwan has been battling a rise in infections after months of relative safety. As of May 31, there are 8,511 confirmed Covid-19 cases nationwide, in which 1,133 cases has recoverd. Though the number increased rather quickly compared to earlier this year, both the total confirmed cases and the ratio of confirmed cases over population remain low compared to some other parts of the world.


To manage outbreak containment, the government imposed tighter social restrictions and raised the Covid-19 alert to the second highest level; Taiwan’s citizens show incredible cooperation by wearing masks at all times and executing self-lockdown. Recently, President Tsai Ing-wen announced that a total of 30 million doses of Covid vaccine has been acquired against all odds, with domestically developed vaccines entering the final stages of their clinical trials. With the collaboration among government, medical personnel and the community, Taiwan has every confidence that the epidemic can lessen as more and more Taiwanese get vaccinated in the very near future.


Solid economic fundamentals

Taiwan has demonstrated tremendous economic resilience and remained strong in fundamentals. The gross domestic product expanded 3.11% in 2020, and the economic growth rate in the first quarter of 2021 reached 8.16%; this is a 10-year record high and growth is projected at 4.64% in 2021. These statistics are measurable confirmation of Taiwan’s vigorous economic momentum.


Bullish market backed by business resilience

As the global battle against the COVID-19 pandemic continues, the Taiwan stock market carries on with its bullish streak from last year. TAIEX, Taiwan market’s benchmark index, leads the way and hit new highs among global markets in 2021. Many listed companies in Taiwan have seized the opportunity to seek transformation and breakthrough in terms of business operations.


Listed companies deliver strong performance

Listed companies in Taiwan reported the total net profit before tax of NT$ 930 billion (US$ 33.2 billion) for the first quarter of 2021, which is a YOY increase of 184% compared to 2020 and brings another 10-year historic high. The accumulated revenue of all listed companies from January to April this year is NT$ 11.75 trillion (US$ 419.6 billion), which marks an increase of 24.76% compared to the same period in 2020. In April 2021, listed companies as a whole  reported  NT$ 3.06 trillion (US$ 109.4 billion)  in total  revenue, which is 21.9%  higher  than  the  total  revenue  in April 2020. Collectively, all these quantifiable results establish Taiwan’s listed companies as profitable and performance-driven.


TWSE is fully prepared for uninterrupted operation

As the market operator of the Taiwan capital market, the TWSE knows  the importance of a properly functioning capital market. Therefore, the TWSE has announced that it will not cease trading during the pandemic. The TWSE has an all-encompassing Business Continuity Plan in place, and has implemented work-from-home and off-site work as precautionary measures. There are also two back-up trading systems in different locations to safeguard uninterrupted operations.


Closely monitor to ensure transparent and efficient market

The TWSE is fully confident that Taiwan’s capital markets are well prepared to meet the challenges of the pandemic. With the cooperation of listed companies and market participants, the exchange firmly believes the capital market can provide the reliable support the economy needs in this Covid period. In the future, the TWSE will closely observe the impact of the pandemic on the capital market, as well as deliver the utmost level of information disclosure and market efficiency.


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