FTSE Group is expected to announce the results of its study on market classification in the week of March 22, Christine Huang, the index compiler's Hong Kong-based regional sales manager, said in a phone interview.
FTSE will also release an implementation plan that may include raising Taiwan and South Korea to developed market status, Huang said.
Money managers who measure their performance against the FTSE's indexes are likely to buy stocks of companies that are added and sell those that are deleted. Some US$2.5 trillion worth of funds track the FTSE's indexes, according to Chris Lobello and Dodo Cheng, analysts at CLSA Asia-Pacific Markets in Hong Kong.
The index compiler, which is owned by the London Stock Exchange and Pearson Plc's Financial Times newspaper, adds or subtracts members from its FTSE Global Equity Index series of benchmarks to ensure they comprise 95 percent of the stocks globally that are available to investors.
In South Korea, NCsoft, the nation's largest online game maker, Hankook Tire, the country's biggest tire maker, and Daewoo International Corp, a trading company, may be added, according to a report by LG Investment & Securities Co last month.
Huang said there will be fewer deletions from FTSE's indexes than additions.
Increased buying
An upgrade of South Korea and Taiwan by FTSE, a move also being considered by its competitor Morgan Stanley Capital International Inc, may prompt some investors to consider those countries' markets as less risky and lead to increased foreign investment in their stocks, analysts have said.
The index compiler has three country classifications: Developed, Advanced Emerging and Emerging. Taiwan and South Korea, home to Asia's fifth- and sixth-largest stock markets by value, are currently classified as Advanced Emerging.
"Even small tweaks to how the US$2.5 trillion benchmarked against the FTSE worldwide is spread around mean big differences for Asia," CLSA's Lobello and Cheng wrote last month.
FTSE wrote in November in a consultation paper sent to clients that South Korea and Taiwan "would be put on the index compiler's so-called Watch List and with the possibility that the two markets may be promoted to developed status in 2005."
As an Advanced Emerging market, shares of South Korean and Taiwanese companies are currently included in 24 FTSE indexes used by international money managers, according to LG Investment.
More indexes
A move to Developed Market status would raise the number to 30 indexes, including the FTSE's All-World Developed Index.
Presidential elections in Taiwan this month may cause the FTSE to delay its decision to upgrade the status of Taiwan's stock market, some investors said. The election is scheduled for March 20 and the new president will take office on May 20.
President Chen Shui-bian's (
Investors expect "no changes before May, when the next Taiwan president take office," said Jerry Chen, who helps oversee US$640 million in Taiwanese stocks at First Global Investment Trust Co (元大投信) in Taipei. "FTSE is likely to wait until all the political influences settle down."
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure