Back to list

MSCI maintains Taiwan's emerging market status

2012/06/21 16:02:34

Taipei, June 21 (CNA) MSCI Inc., a global index provider, has decided to maintain Taiwan's emerging market status after its annual market classification review, citing concerns over market accessibility as a cause.

In a statement released on its website Wednesday, MSCI said, however, the MSCI Taiwan Index will remain under review for a potential upgrade to a developed market status as part of the 2013 annual review.

"The MSCI Taiwan Index meets many Developed Markets criteria, including economic development and market size and liquidity," MSCI said, "However, market accessibility issues still prevent the reclassification of the MSCI Taiwan Index to Developed Markets."

MSCI said there is only a local foreign exchange market operating in Taiwan, while there is no offshore liquidity to trade the Taiwan dollar after the local market hours.

At the same time, MSCI has also decided to keep South Korea among the emerging markets after the annual review, citing market accessibility as an issue, while the index provider said it will consider the MSCI Korea Index under the 2013 annual review for a potential upgrade.

MSCI said the MSCI Korea Index has met most of the criteria of the developed markets under the MSCI market classification framework, while certain market accessibility problems which were addressed in the previous reviews remained unsolved, such as the limitations in currency convertibility and an absence in the offshore currency market.

It was the third time for MSCI to overlook Taiwan in its annual classification review and the fourth failure for South Korea to be upgraded to a developed market under the review.

As part of the global financial markets, the equity markets in Taiwan and South Korea have been affected by lingering concerns over the debt problems in the eurozone, market analysts said.

According to Bloomberg, the average daily trading volumes of the Taiwan and South Korea markets in the first 19 days of this month were at least 20 percent lower than the daily average for this year.

(By Liu Shu-chin and Frances Huang)