"Taiwan and Mainland China are a step closer to a more harmonious relationship," says Yiannis Mostrous. In The Silk Road Investor, the Asian stock specialist looks at an ETF that will benefit from this trend.
"Nearly a year ago, I forecast that 'Taiwan could be the biggest out-of-consensus investment story--along with Japan--as the first decade of the 21st century comes to a close.'
"The government in Beijing has now given its blessings for public health officials from Taiwan to attend, as observers, the 62nd World Health Assembly (WHA) meeting in Geneva, 18 to 27 May.
"Note that the WHA assembly is only open to "Member States," a definition that has given China the ability to block Taiwanese participation for a long time.
"It's clear that the Chinese government has decided to reward the Taiwanese leader Ma Ying-jeou efforts to expand Taiwan's presence in the international scene, in cooperation with the Mainland.
"Furthermore, both sides have begun implementing plans for greater economic integration. The latter development will take Taiwan to the next level of economic growth.
"In addition, China Mobile announced it will acquire a 12% stake in Far EasTone Communications, Taiwan's smallest mobile operator, at a 13 percent premium to the April 29 closing price. Although this is a small investment for China Mobile, the significance of the deal is huge.
"As Taiwan and the Mainland continue to normalize their relationship, more investment capital will find its way to Taipei, boosting the domestic economy and putting Taiwan back at the forefront of global economic growth.
"Long-term investors should have exposure to Taiwan; the most efficient way to accomplish that is through iShares MSCI Taiwan Index (NYSE: EWT), an exchange traded fund invested in Taiwan-based companies."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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