Fundamentals
Valuation Ratios in Equity Markets
Country
CAPE
PE
PC
PB
PS
DY
Taiwan
21
16
9.9
1.9
1.0
3.0%
World
21
19
10.8
2.1
1.2
2.3%
Taiwan’s market is only slightly cheaper than the world average. When corrected for sector exposure, the 14% discount widens to a 20% discount.
Economic Freedom
Taiwan is ranked the 14th freest country in the world. Its rating has strengthened consistently over the last few years.
2015 Index of Economic Freedom
Prudent macroeconomic policy within a stable legal and monetary environment have driven thestrong rise. In economic freedom, Taiwan is a model of success for mainland China.
Transparency
Out of 175 countries measured, Taiwan is ranked the 35th least corrupt. Taiwan’s government has strong efforts towards controlling corruption.
Discounted Exposure
Taiwan Fund, Inc (NYSE:TWN) currently trades at about a 10% discount to its NAV. That discount is greater than its 10 year, 5 year, and year to date average.
Conclusion
Taiwan’s market is moderately priced and TWN offers a moderate discount. While it is not one of the greatest international opportunities, it is one of many places in which to seek diversification away from the US market.
