Last weekend’s Taiwan election is unlikely have any major impact on the investment landscape of the island after Tsai Ing-wen and her Democratic Progressive Party secured the island’s presidency.
That’s the view of Hong Kong-based Arthur Kwong, head of Asia equities at BNP Paribas Investment Partners.
He told Citywire Asia as long as Taiwan continues to focus on developing new technologies, Taiwan should be attractive for investors.
‘At the end of the day, it doesn’t matter who runs the country, the leadership needs to understand the importance of the technology sector, which the island has been held accountable for.
‘You need to understand what drives the technology sector and how you are going to line up with the labour force to facilitate the demand coming from your customers.
'That’s very dynamic and fast changing, because technology is a sector where you keep innovating,’ said Kwong, adding that Taiwan needs to adapt this new changes.
Other Asian bets
Besides being upbeat about Taiwan's technology industry, Kwong also said the next major theme for Asian equities is to focus on stocks that are less sensitive to US dollar strength and emerging market currency depreciation.
Furthermore, Kwong said he is positive on the ASEAN theme. ‘We are looking at the beneficiaries of infrastructure, banking and consumption in the ASEAN region, while we are not so bullish on old sectors like commodity.
‘However, very few sectors, those local or domestic-driven sectors, can benefit from the infrastructure industry,’ he said, adding that these sectors are beneficiaries of China’s One Belt and One Road initiative and the Trans-Pacific Partnership from the US.
The equity head also finds Chinese insurance companies attractive. In the long run, the sector will benefit from the Federal Reserve’s tightening, though in the short term, it may suffer from depreciation in bond prices, according to Kwong.
China’s internet sector is another bet for Kwong. ‘We still like the internet sector in Asia. We think the Chinese internet business is still doing very well.
‘Like the New economy, the internet sector is taking a lot of market share from the Old economy and that should continue. So this is another long-term theme.'