Taiwan Prepares for U.S. Election Fallout: Financial Market Strategies Revealed

Taiwan's Financial Supervisory Commission (FSC) chairman revealed in an interview that the agency has prepared contingency plans for any outcome of the U.S. presidential election. The financial markets, especially Taiwan's Semiconductor Manufacturing Co (TSMC), have seen volatility due to geopolitical influences and candidate statements.

In an exclusive interview with Reuters, the chairman of Taiwan's Financial Supervisory Commission (FSC), Jin-lung Peng, disclosed that the agency is fully prepared with contingency plans for any possible outcome of the U.S. presidential election. The FSC's strategic planning is closely tied to observing international geopolitical and political risks, especially concerning capital market changes.

Taiwan's stock market, especially shares of its leading semiconductor company, Taiwan Semiconductor Manufacturing Co (TSMC), experienced a record rise earlier this month. However, market trends shifted following comments from Republican presidential nominee, Donald Trump, accusing Taiwan of undermining America's semiconductor business and suggesting Taiwan compensate the U.S. for defense support. This shift in sentiment reflects the fluctuating political landscape as Vice President Kamala Harris, a probable Democrat nominee, narrows the gap in recent polls.

The chip sector, a significant driver of Taiwan's market rally, backed by global AI advancements, raises some concerns of over-concentration. Addressing these concerns, Peng compared Taiwan to other international markets like South Korea, dominated by single sectors involving industry giants such as Samsung.

(With inputs from agencies.)