In a move aimed at providing global investors more information on the performance of Taiwan's electronics shares, Bloomberg and Jardine Fleming have teamed up to launch indexes focusing on electronics.
According to the two companies, the new indexes will provide comprehensive analysis of the nation's electronics sector in a real-time news format.
The new indexes underline the increasing importance of Taiwan's electronics industry to global financial markets.
Jardine Fleming designed the new indexes to be available via Bloomberg terminals worldwide.
Two years ago, the banking and electronics sectors each made up about 25 percent of Taiwan's market. Today, electronics alone accounts for 58 percent of the TAIEX index.
At the beginning of 1988, the total value of Taiwan electronics stocks was NT$2.6 trillion. Today that figure has nearly tripled to NT$7.5 trillion -- a clear sign that Taiwan's electronics industry has come of age.
Bloomberg and Jardine Fleming have designed the indexes into nine separate categories including: computer components, computer peripherals, electronics distributors, PC systems, printed circuit boards, semiconductor designers, semiconductors, semiconductor manufacturing and semiconductor packaging.
"The Bloomberg-Jardine Fleming [BJF] electronics sub-indexes will allow investors to analyze the performance of the electronics sectors in greater detail than before," said David Hsu (許立慶), country manager at Jardine Fleming Taiwan. "By using the sub-sector indexes, investors will be able to analyze the driving force of the electronics industry."
Hsu further explained the usefulness of the indexes. For example, last Tuesday the electronics sub-index of the TAIEX fell 0.6 percent.
But after looking at the BJF indexes, more details could be told. The BJF semiconductors index posted a loss of 2.8 percent, the BJF Peripherals index fell 3.9 percent and the BJF Distributors index was down 6.6 percent. Meanwhile, the BJF PC Systems index rose 3.2 percent.
Therefore, the gains among PC systems companies helped to offset losses in other parts of the electronics sector.
"Simply looking at electronics index performance will not reveal a clear picture of what happened in the markets," Hsu said.
"Jardine Fleming provides its market analysis from its research team to break the electronics sectors into sub-sectors. International investors can access sub-sector information through Bloomberg terminals and better manage their investments in Taiwan. The weights of the indexes are based on each company's market capitalization."
Another market watcher indicated more extensive coverage of the electronics market would be a plus for investors.
"It could be a handy tool for electronics shares investors, especially for fund managers," said Larry Liao (廖瑞雄), a fund manager at ING-CHB Securities Investment Trust Company. "A sub-index for electronics shares in the Taiwan Stock Exchange is presently not enough.
While Taiwan's electronics industry keeps on expanding into different fields in recent years, there is demand for the sub-sectors indexes in the market. If the BJF indexes could actually reflect the performance of different sub-sectors, it could be another important indicator for investors to watch besides the TAIEX."
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