New Delhi49 minutes ago
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Taiwan has left India behind in terms of stock market value (market cap). In the era of Artificial Intelligence (AI), the huge rise in the shares of ‘Taiwan Semiconductor Manufacturing Company’ (TSMC), the world’s largest chipmaker company, has given Taiwan this lead.
According to Bloomberg, as of Monday, Taiwan’s market cap reached $ 4.95 trillion (about Rs 415 lakh crore), while India’s value has fallen to $ 4.92 trillion (about Rs 413 lakh crore). Now Taiwan’s name has been included in the top-5 stock markets of the world after America, China, Japan and Hong Kong.
Chip company is behind Taiwan’s victory
The biggest reason for this jump in Taiwan’s stock market is TSMC company. This company alone has a 42% stake in Taiwan’s main index. So far this year, the company’s shares have registered a gain of 49%. This company has dominance in the supply of semiconductors (chips) used for AI technology all over the world, which is benefiting the Taiwanese market.
New rules gave boost to Taiwan
Recently, Taiwan’s regulator has relaxed investment rules. Now domestic funds can invest up to 25% of their net assets in any one big company, earlier this limit was only 10%. Currently only TSMC meets this criteria. According to JP Morgan, this change can bring additional investment of $ 6 billion (about Rs 50 thousand crore) in the Taiwan market.
Foreign investors withdrew ₹2 lakh crore from India
This year has been challenging for the Indian stock market. So far this year, foreign investors have withdrawn about $ 24 billion (about Rs 2 lakh crore) from the Indian market. The main reasons for this have been the high valuation of Indian shares and the weakness of the rupee. In contrast, investors are pouring money into markets like Taiwan and South Korea that are directly involved in AI hardware and manufacturing.
Indian market is backward due to these 3 reasons
- Expensive energy and inflation: Rising energy costs have raised inflation concerns in India, impacting growth expectations.
- Shortage of AI companies: There is a dearth of companies in India that are directly involved in global AI infrastructure or hardware manufacturing.
- Slowdown in corporate earnings: The pace of profits of Indian companies has also been slow, due to which investor confidence has diminished.
India is still ahead in terms of economy
Even though Taiwan has overtaken Taiwan in the value of the stock market, India’s dominance in the total size of the economy (GDP) remains intact. According to IMF estimates, India’s economy is worth $4.15 trillion, while Taiwan’s GDP is only $977 billion. India remains one of the fastest growing major economies in the world.
What is market cap?
‘Market capitalization’ of the stock market of any country means the total value of shares of all the listed companies there. If the market cap of a country is increasing, it means that the confidence of investors in the companies there is increasing.
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