August 27, 2004
Morgan Stanley Capital International (MSCI) is removing the Limited Investibility Factor (LIF) currently applied to its Taiwan Index in two separate phases, recognizing significant improvements in Taiwan's business environment for foreign investment over the past few years.
The change will be implemented in two separate phases. In the first phase, MSCI will increase Taiwan's LIF from 0.55 to 0.75 as of Nov. 30, 2004; in the second phase, MSCI will increase the Taiwan's LIF from 0.75 to 1 as of May 31, 2005. With full inclusion, Taiwan surpasses South Korea as the largest market represented in the MSCI Emerging Markets Index, comprising 20.2%, based on their market values as of June 2. The island accounts for 26.85% of the MSCI All Country Asia-Pacific excluding Japan Index, surpassing both South Korea and Hong Kong, according to a statement on MSCI's website.
Local analysts said Taiwan's performance in the MSCI indices was prompted by revised policies put forth in July – the government scrapped restrictions on the amount of stock that qualified foreign institutional investors (QFII) could hold.
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