Taipei-Equity investors on the local main board posted more than NT$670,000 (US$22,259) each in gains on average in 2019, when the benchmark weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, rose by more than 23 percent over the course of the year, according to data released by the TWSE.
The Taiex rose 2,269.73 points, or 23.33 percent, in 2019 to close at 11,977.14 Friday, the last trading session of the year.
Due to the strong upturn in the index, market capitalization on the main board rose by about NT$7.095 trillion from a year earlier to NT$36.41 trillion at the end of 2019.
Based on the roughly 10.53 million investors registered on the exchange as of the end of November, the increase in market cap in the year showed that each investor posted an average NT$673,400 in gains in the year, according to the data.
Market analysts said the solid gains on the local main board were largely driven by a strong showing from the local semiconductor industry, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market.
TSMC shares soared 46.78 percent in 2019 with its market cap rising by NT$2.81 trillion in the year, making it the major contributor to the main board's market cap increase.
Analysts said foreign institutional buying was the main driver of the strong performance of the local equity market as they kept moving funds into the region, boosting liquidity.
As global trade showed positive signs, with the United States and China agreeing to a phase-one deal to resolve their trade dispute, foreign institutional investors saw their appetite for risk increasing and picked up more local equities, including TSMC, the analysts said.
Under such circumstances, the analysts said, despite the significant average gains posted by equity investors, large profits went to foreign institutional investors, which accounted for about 78 percent of TSMC's market cap.
They added that foreign institutional investors were the main beneficiaries of the booming equity market in Taiwan, while not every retail investor raked in profits.
According to the TWSE, foreign institutional investors bought an aggregate net NT$244.16 billion-worth of stocks in 2019, with total purchases and selling at NT$8.16 trillion and NT$7.92 trillion, respectively.
Hua Nan Securities Investment Management Chairman David Chu (???) said that as the trade tension between Washington and Beijing has eased, global trade is expected to improve, which could boost export sales worldwide.
Therefore, Chu said, the U.S. markets are likely to post gains in 2020 and the local market is expected to follow suit after a strong 2019.
Cathay Futures analyst Tsai Ming-han (???) said that at a time when the world is gearing up to develop 5G technology, Taiwan's electronics sector is expected to ride the wave of this tech development to remain an anchor for the broader equity market.
Source: Focus Taiwan News Channel