Taiwan: The Other China
Jupiter, Fla. (PRWEB) March 27, 2008 -- Tony Sagami takes a closer look at Taiwan and the potential growth there. Mr. Sagami examines Taiwan and states the reasons why it could be the next "China" as far as strength in resources and growth goes.
Taiwan, also known as the Republic of China, has been independent since the end of a civil war with China in 1949. A majority of the one million Chang Kai Shek supporters who fled to Taiwan were the Chinese who had the most to lose under communism: the merchants, doctors, business owners, and well educated professionals. Those entrepreneurial Chinese brought their work ethic, drive, skills, and business acumen that transformed Taiwan from an underdeveloped agricultural island to an economic powerhouse that is one of the largest producers of high tech goods on earth.
Taiwan is currently the world's largest manufacturer of computer chips and is a leading producer of LCD panels, DRAM computer memory, networking equipment, personal computers, and consumer electronics. It also has its own high tech metropolis, Hsinchu City, which rivals Silicon Valley.
On the negative side, there are more than 700 Chinese missiles aimed at the island. And the relationship between China and Taiwan has been described as a broken marriage. Beijing wants to reconcile the two countries under one ruling roof while Taiwan wants to stay separated and independent.
For the last eight years, Taiwan has been ruled by a president who favored outright divorce, which is why the Chinese government has threatened military action against Taiwan should it seek a formal divorce. As a result, the Chinese legislature passed an anti-secession law in 2007 authorizing military action against Taiwan if it moves toward independence.
But most of that tension is about to disappear because Taiwan just elected a new president, Ma Ying-jeou, and the recent election could jump start the Taiwanese economy. Ma Ying-jeou is a pro-business leader who will push for closer ties with mainland China and defuse tensions between the two countries. For instance, Ma, a Harvard-educated lawyer, has promised to revitalize the island's economy with closer economic and transportation ties to booming mainland China. The election of Ma may create the biggest peace dividend our world has ever seen and reward savvy investors who jump on board early. Plus, if politics weren't enough to build upside market momentum, consider that Taiwan has one of the world's most undervalued stock markets.
"Taiwanese companies trade for an average of 16 times earnings, a bargain compared to 19 times for Hong Kong and 22 times for Chinese stocks listed on foreign markets, such as the U.S. In fact, the Taiwan stock market is essentially where it was eight years ago while the Chinese market has skyrocketed during that time," Mr. Sagami states.
To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?Taiwan-Stocks-Undervalued-1587
About TONY SAGAMI & MONEY AND MARKETS
Tony Sagami, a veteran investment advisor and a leading expert on Asian markets, is the owner and founder of Harvest Advisors, an investment research and money management company. Mr. Sagami has been managing money for more than 20 years and is one of the early pioneers in the application of technical and quantitative analysis to mutual funds and stocks. He is a featured contributor to Weiss Research's daily e-letter, Money and Markets and monthly Safe Money Report as well as the editor of Asia Stock Alert.
Prior to establishing his own firm, Mr. Sagami was managing director at W.E. Donoghue & Co, serving additionally as the director of investment. During his successful career, he also held the position of account executive at Merrill Lynch.
Mr. Sagami's views on Asian markets, specifically Chinese investments, have been featured in publications such as The Wall Street Journal, Barron's, Kiplinger's, Smart Money, Business Week, New York Times, Washington Post, Investors Business Daily, Bloomberg, Financial Planning Times, Mutual FundsMagazine, Chicago Tribune, and the LA Times, as well as on CNBC and CNBC Asia.
Mr. Sagami holds a degree in economics from the University of Washington.
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.
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