Taiwan Stock Market Eyes Three Key Issues Amid May Challenges
As May arrives, the Taiwan stock market faces multiple challenges. Experts point out that rapid changes in the international political and economic landscape, along with the traditional pressure of "five miserable months and six disastrous months," will impact market trends. Trump’s tariff policies, the 520 presidential inauguration market sentiment, and the effects of the COMPUTEX trade show emerge as three key factors influencing the stock market’s rebound.
In April, the global market experienced significant corrections due to Trump’s announcement of high tariffs. Although panic sentiments have eased, the declines in both US and Taiwan stocks remain notable, with ongoing impacts expected, particularly regarding semiconductor tariffs and currency manipulation reports expected to be released in May, drawing significant public attention.
According to a report from Fubon Investment, Taiwan's export-oriented industries are particularly sensitive to exchange rate fluctuations. A 1% appreciation of the New Taiwan Dollar (NTD) is expected to affect pre-tax profitability of listed companies by approximately 0.5%. Further, the appreciation of the NTD is anticipated to negatively impact profits for electronics stocks like TSMC and traditional industries, directly affecting their operating profit margins. Historical experiences suggest that food stocks may benefit from the NTD appreciation, generating foreign exchange gains.
Simultaneously, as the 520 presidential inauguration approaches, policy-related sentiments are expected to boost market confidence. According to analysis by KGI Investment, the National Security Fund's ongoing support and the continuation of short-selling regulations may foster the rebound trend until around the 520 inauguration, enhancing the appeal of stocks related to policy themes.
Additionally, the COMPUTEX 2025 event is scheduled from May 20 to 23, with attention focusing on the potential continuation of AI-related supply chain developments, which could serve as significant indicators for stock performance in the market.
