Taiwan, the world’s fifth-best-performing stock market this year, must overcome several obstacles before it can be categorized as a developed market in benchmark indexes, FTSE Group said.
“It will require a lot of work to turn into a developed market by August,” when FTSE’s next review takes place, Paul Hoff, managing director for the Asia-Pacific region, said in a telephone interview yesterday in Taipei. “It’s only been a few months since the last review.”
The improvements sought by FTSE include free availability of the New Taiwan dollar and changes to rules on stock borrowing and lending, Hoff said. The outcome of the next review will be announced in September.
The index ranks Taiwan as an “advanced emerging” market.
A higher ranking would help attract more of the US$3.5 trillion in investments that are benchmarked against FTSE’s indexes.
“The FTSE gave us feedback by investors,” Michael Lin (林火燈), senior vice president at the Taiwan Stock Exchange, said by telephone in Taipei yesterday. “We will strive to make the improvements for the investors; that’s more important to us, compared with a status upgrade.”
Rival index compiler MSCI Inc last month said it would consider including Taiwan among developed markets.
The TAIEX index has risen 48 percent this year, the fifth-best performance among 88 indexes tracked globally by Bloomberg.