Allianz Global Investors Taiwan said the pullback has reset valuations to more reasonable levels, even as the benchmark slipped below 40,000 and investors watched AI spending and earnings expectations.
Taiwan’s TAIEX closed at 39,933 on July 30, extending its losing streak to a fifth straight session and dropping below the 40,000-point mark after shedding more than 3,000 points over five trading days. The benchmark fell 105 points, or 0.2%, after opening lower, briefly turning positive and touching an intraday high of 41,155 before renewed selling pushed it lower. Trading volume reached NT$1.1 trillion, or about $33.9 billion. The decline left the index below its 5-day, 10-day, monthly and quarterly moving averages, although it remained above the half-year moving average. TSMC was one of the few bright spots, rising NT$5, or 0.2%, to NT$2,205. Amid the selloff, Allianz Global Investors Taiwan said market fundamentals remained intact and had improved relative to earlier expectations. Chief Investment Officer Chang Wei-min said the market had retreated about 15% after becoming overextended in the second quarter, bringing valuations back into a range that may offer long-term investors a better entry point through dollar-cost averaging. Chang said Allianz Global Investors Taiwan’s internal tracking of 250 key companies points to earnings-per-share growth of 60% in 2026 and 20% to 25% in 2027. He said some new product launches had been delayed by about one quarter, but the effect on the broader supply chain was limited. Allianz managers also said Taiwan’s bull market structure remained in place, though gains may become more selective as investors shift from broad market rallies to sector rotation and stock-specific differentiation. The firm said AI-related infrastructure suppliers such as computing, chip, device and data center companies could be key beneficiaries as cloud service providers continue to expand capital spending. It also said a fourth active ETF focused on the Asian semiconductor industry is expected by the end of the third quarter. Market attention is now turning to whether companies can translate AI-related demand into revenue, profit and cash flow as earnings season and investor conferences approach.