Markets

Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

The election of Tsai Ing-wen as Taiwan president was supposed to be a disaster for the economy and the stock market. The leader of the independence-leaning Democratic Progressive Party would anger China, hurt trade ties, and scare away business, the thinking went.

Taiwan's 23 million people aren't the only ones who ignored those warnings by giving Tsai the largest victory in the 20-year history of democratic presidential elections. Investors cheered, too, sending the stock market into bull territory.

Getting On With It
Taiwan's Taiex stock index entered bull territory July 15, climbing 20 percent from its Aug. 24 low, with a 15.3 percent gain since Tsai Ing-wen was elected
Source: Bloomberg
Foreign Flows
Overseas net buying of Taiwan equities has outpaced even its archrival South Korea as investors shrug off concerns about the relationship with China
Source: Bloomberg

The benchmark Taiex index climbed 0.9 percent Friday to close at 8,949 points, taking it more than 20 percent above its three-year low on Aug. 24, 2015. Tellingly, that move includes a 15.3 percent gain since the Jan. 16 election, when Tsai defeated the ruling Kuomintang's Eric Chu and her party took control of the legislature in a concurrent balllot.

While China reacted to the election by scrapping a diplomatic truce, barring Taiwan's participation in international meetings, and sending fewer tourists to the island, foreign investors poured more than $7.7 billion into the stock market -- driving the Taiex's price-earnings ratio to the highest level in 22 months.

Their message appears to have been: We don't worry about cross-strait politics, and neither should you.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net