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MSCI Taiwan index likely to get more electronic stocks

Securities houses are expecting that more electronics issues will be included in the Morgan Stanley Capital International (MSCI) Tai-wan index since Morgan Stanley is making an evaluation of the current Limited Investability Factor (LIF) applied to the MSCI Taiwan Index constituents.

MSCI announced late last month that it was making a formal review regarding the relaxation of restrictions on foreign portfolio investors in Taiwan and its effects

The review may lead to a higher LIF for the MSCI Taiwan Index constituents, according to the announcement.

MSCI has applied the LIF in Taiwan as an instrument to reflect market restrictions and obstacles to foreign investment.

Currently, it applies to LIF of 0.55 to the free float-adjusted market capitalization of all constituents in the MSCI Taiwan Index.

While the company is sche-duled to announce changes today to the MSCI Standard and Small Cap Index Series, the MSCI Global Value and Growth Index Series, Jih Sun Securities Co (日盛證券) analysts said that four electronics stocks -- Chunghwa Telecom Co (中華電信), Nanker Sensor Co (南科), Sunplus Technology Co and EZfone (通話王) -- are likely to be selected to be added to the MSCI Taiwan Index.

Out of the 91 issues included in the MSCI Taiwan Index, 38 are electronics stocks.

Analysts said that the MSCI adjustment would stimulate foreign investors' interest.
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