UBS Switzerland AG has upgraded its rating on Taiwan equities from neutral to attractive, citing strong AI-related demand, rising earnings expectations, improved pricing power and margin expansion among leading semiconductor companies.
The bank maintained its MSCI Emerging Markets index target at 1,920 for June 2027, while keeping the December 2026 target unchanged at 1,850. The MSCI EM index was last at 1,668 on Wednesday.
UBS projects aggregate earnings growth of 62% for emerging market equities in the current year and 18% for next year. For Taiwan specifically, the bank forecasts earnings growth of roughly 40% in both 2026 and 2027.
Approximately 40% of MSCI EM index constituents have reported earnings so far, with 43% of those exceeding expectations. Aggregate earnings growth across the index is tracking at 57% year-over-year, accompanied by broad upward revisions to forecasts.
Mainland China retains an attractive rating on the back of broadening earnings momentum beyond the internet sector, supported by policy-driven investment in infrastructure, power grids, telecom and AI-related capacity. India and Malaysia are also rated attractive, while Brazil, Thailand, the Philippines, Mexico, South Africa, Indonesia and South Korea remain at neutral.
UBS flagged sustained dollar strength, potential disruptions to the AI investment cycle and a sharp slowdown in corporate spending as key downside risks to the outlook.
