Morgan Stanley Capital Interna-tional Inc (MSCI) said it will give full weight to Taiwan's stocks in global indexes, and investors may buy about US$4 billion of the island's equities to track the benchmarks, analysts said.
Local companies, which make up the fifth-largest stock market in Asia by value, have 55 percent of their market value represented in the indexes. MSCI said it will increase that to 75 percent at the close of trading on Nov. 30, and to 100 percent next May 31.
With full inclusion, Taiwan would surpass South Korea as the largest market represented in the MSCI Emerging Markets Index, making up 20 percent, based on market values as of June 2.
The island would account for 27 percent of the MSCI All Country Asia-Pacific excluding Japan Index, exceeding both South Korea and Hong Kong, said MSCI in a statement on its Web site.
"It's clearly very bullish for Taiwan, because of the huge amount of quasi index money that will have to go into that market," said Alexander Muromcew, who helps manage US$600 million in global equities as a fund manager for Loomis Sayles and Co in San Francisco. "Unfortunately, it means that money has to go out from some other markets and so, net-net, it's a negative particularly for markets in Hong Kong and South Korea."
Muromcew said that Loomis Sayles may increase its investment in Taiwan stocks after the announcement.
The increase results from the scrapping last July of restrictions on the amount of stock that overseas investors can hold. In April, MSCI started a consultation on whether to grant Taiwan greater representation.
Taiwan Semiconductor Manu-facturing Co and United Microelectronics Corp will attract most of the money that index-tracking funds may put into the country, said Alex Ypsilanti, Merrill Lynch and Co's Hong Kong-based head of Asia Pacific ex-Japan derivatives strategy. The chipmakers are two of the nation's largest companies by market value.
Goldman Sachs Group Inc on June 7 recommended clients buy more of the island's equities and forecast that a weighting increase would help the benchmark TAIEX index rise as much as 30 percent in a year.
"The move will mean more inflows into the Taiwanese market by foreign investors," said Francesco Rizzuto, a Milan-based fund manager at Nextra Investment Management SGR SpA, who helps manage 90 billion euros (US$109 billion) in assets.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique