Cross-strait relations could face challenges following the win by the Democratic People’s Party candidate. But a softer victory in the parliament may allow tensions to ease, according to Bank of Singapore’s Kelvin Tang.
Taiwan recently elected the Democratic Progressive Party’s (DPP's) Lai Ching-te as its new president. Despite the party securing its third consecutive win with 40 percent of the vote, it lost the majority in the local parliament.
A key theme in the elections is Taiwan’s stance with regard to China’s territorial claims over the self-ruled island, which China calls a rogue province. While DPP rejects Beijing’s claims and insists on a separate Taiwanese identity, the softer election victory could result in reduced tensions in cross-strait relations with China, according to Bank of Singapore’s Hong Kong branch chief investment officer Kelvin Tang.
Balancing Effect
In the absence of a parliamentary majority, this will have a «larger balancing effect» which could support Taiwan-China relations.
«To a certain extent, there could be less resistance [against China],» Tang said at a media briefing attended by finews.asia. «Nonetheless, DPP was already the ruling party so this is just the status quo. No matter the outcome from this election, the US or others, not much is expected to change unless China’s bottom lines are crossed.»
2024 Outlook
Overall, the bank is broadly positive on markets in 2024, with a modestly tactical overweight risk stance. It remains overweight in fixed income on developed market investment grade bonds and US Treasuries while favoring the long end of the yield curve (8-15 years). In equities, the lender is overweight on Japan and neutral on the US, Europe and Asia ex-Japan. By sectors, it favors quality growth from tech and defensive value.
Bank of Singapore also highlighted four key investment themes for the year: impact from elections; real returns in an inflationary environment; sustainable investments and; AI-related tech opportunities.
