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Taiwan market gets a minor boost in MSCI emerging market index.

Taipei, Feb. 12, 2010 (CENS)--Following two consecutive quarters of reduction, Taiwan stock market receives a minor boost of 0.0166 of a percentage point for its weighted share in the MSCI (Morgan Stanley Capital International) emerging market index, which remains at 11.1% after being rounded, according to the quarterly adjustment of the stock market indices released by MSCI at 11:00 p.m., Feb. 10, central European time (early morning of Feb. 11, Taipei time).

The local market's weighted share in the MSCI Asia Ex-Japan index, however, drops 0.02 of a percentage point but the share, after being rounded, remain at 16.4%.

An executive of a foreign financial institution pointed out that the gain of Taiwan market in the MSCI emerging market index runs counter to the widespread expectation among market players for a minor reduction, in view of recent downturn of the market. The increase augurs well for the performance of the market after it reopens following the Chinese Lunar New Year holiday.

The minor adjustments in the aforementioned two indices are expected to produce only limited effect on the movement of foreign funds in the market. MSCI usually only makes minor adjustments for its indices in February and August, different from the adjustments in May and November, whose scales are larger.

Another noticeable development for Taiwan stocks in the quarterly adjustment is the inclusion of Taiwan Semiconductor Manufacturing Corp. (TSMC), the world's leading IC foundry, into the MSCI ACWI (All Country Worldwide Index) Islamic Index, the first Taiwanese stock to become the index's constituent stock. TSMC was one of the three major stocks, the two others being UPS and Colgate-Palmolive, added to the list of the index's constituent stocks.

The inclusion is expected to induce considerable investment funds, to the tune of billions or tens of billions of NT dollars, for TSMC stock, but the effect on TSMC stock price remains to be seen, in view of its huge capitalization.


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Title Annotation:Morgan Stanley Capital International
Publication:The Taiwan Economic News
Geographic Code:9TAIW
Date:Feb 12, 2010
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