MSCI to Remove in Two Phases the Limited Investability Factor -LIF- Currently [DKKYMRG]
Applied to the MSCI Taiwan Index
Business Editors
GENEVA--(BUSINESS WIRE)--June 18, 2004--MSCI announced today that,
having completed a consultation with investors worldwide, it has
decided to remove the Limited Investability Factor (LIF) currently
applied to the MSCI Taiwan Index. The change will be implemented in
two separate phases. In the first phase, MSCI will increase the LIF
from 0.55 to 0.75 as of the close of November 30, 2004; in the second
phase, MSCI will increase the LIF from 0.75 to 1 as of the close of
May 31, 2005.
MSCI's decision to remove the LIF currently applied to the MSCI
Taiwan Index recognizes that significant developments have taken place
to relax foreign investment restrictions in Taiwan over the past few
years. While some investment constraints continue to exist, their
impact is not significantly different from those existing in other
emerging markets and as such do not justify continuing to maintain the
LIF currently applied to the MSCI Taiwan Index. However, MSCI will
continue to monitor developments in Taiwan and will also monitor
market participants' experiences related to the implementation of the
first phase of the LIF increase.
Publication of Provisional Indices
In order to assist market participants in understanding and
preparing for these changes, MSCI will begin publishing on September
1, 2004, provisional indices based on the full removal of the LIF for
the following composite indices: MSCI Emerging Markets (EM), MSCI AC
Far East ex Japan, MSCI AC Asia Pacific ex Japan, and the MSCI Taiwan
Index.
The provisional indices may be used by clients who wish to measure
performance based on the full removal of the LIF ahead of MSCI's
official implementation schedule.
Pro forma impact of the removal of the LIF on the MSCI Emerging
Markets (EM) and MSCI All Country Far East ex Japan Indices
Tables 1 and 2 are provided for illustrative purposes only and
show the pro-forma weights of various countries and regions in the
MSCI Emerging Markets and MSCI All Country Far East ex Japan Indices,
as of June 2, 2004, as a result of the LIF removal in two phases.
In addition, the two tables show the pro forma transition turnover
in the MSCI Emerging Markets (EM) and MSCI All Country Far East ex
Japan Indices that result from the two-phase removal of the LIF and
the distribution of this turnover across the different constituent
countries and regions.
Please note that the turnover data shown is specific to the
current MSCI Emerging Markets (EM) and MSCI All Country Far East ex
Japan Indices and is not indicative of the turnover in any other MSCI
index.
-0-
*T
TABLE 1: TAIWAN LIF IMPLEMENTATION IMPACT ANALYSIS ON MSCI EMERGING
MARKETS (EM) INDEX IN 2 PHASES
----------------------------------------------------------------------
Current: Phase 1:
Taiwan's LIF = 0.55 Taiwan's LIF = 0.75
-------------------- ------------------------------
-------------------Index Mcap---Index---Index Mcap--Index---One-way
-------------------USD mm-----Weight----USD mm----Weight---Index
---------------------------------------Turnover
----------------------------------------------------------------------
KOREA 166,565 19.20% 166,565 19.07% 0.07%
----------------------------------------------------------------------
SOUTH AFRICA 123,153 14.20% 93,858(1) 10.74% 1.73%
----------------------------------------------------------------------
TAIWAN 104,922 12.09% 140,228 16.05% 1.98%
----------------------------------------------------------------------
CHINA 74,150 8.55% 74,150 8.49% 0.03%
----------------------------------------------------------------------
BRAZIL 66,774 7.70% 66,774 7.64% 0.03%
----------------------------------------------------------------------
MEXICO 53,774 6.20% 53,774 6.16% 0.02%
----------------------------------------------------------------------
INDIA 44,358 5.11% 44,358 5.08% 0.02%
----------------------------------------------------------------------
RUSSIA 38,550 4.44% 38,550 4.41% 0.02%
----------------------------------------------------------------------
MALAYSIA 38,967 4.49% 38,967 4.46% 0.02%
----------------------------------------------------------------------
ISRAEL 38,604 4.45% 38,604 4.42% 0.02%
----------------------------------------------------------------------
THAILAND 23,621 2.72% 23,621 2.70% 0.01%
----------------------------------------------------------------------
CHILE 15,378 1.77% 15,378 1.76% 0.01%
----------------------------------------------------------------------
INDONESIA 14,095 1.62% 14,095 1.61% 0.01%
----------------------------------------------------------------------
TURKEY 11,917 1.37% 11,917 1.36% 0.00%
----------------------------------------------------------------------
POLAND 12,011 1.38% 12,011 1.38% 0.00%
----------------------------------------------------------------------
HUNGARY 11,281 1.30% 11,281 1.29% 0.00%
----------------------------------------------------------------------
ARGENTINA 4,434 0.51% 4,434 0.51% 0.00%
----------------------------------------------------------------------
CZECH REPUBLIC 5,900 0.68% 5,900 0.68% 0.00%
----------------------------------------------------------------------
PERU 4,472 0.52% 4,472 0.51% 0.00%
----------------------------------------------------------------------
PHILIPPINES 4,534 0.52% 4,534 0.52% 0.00%
----------------------------------------------------------------------
EGYPT 2,742 0.32% 2,742 0.31% 0.00%
----------------------------------------------------------------------
MOROCCO 1,844 0.21% 1,844 0.21% 0.00%
----------------------------------------------------------------------
PAKISTAN 1,661 0.19% 1,661 0.19% 0.00%
----------------------------------------------------------------------
VENEZUELA 1,306 0.15% 1,306 0.15% 0.00%
----------------------------------------------------------------------
JORDAN 1,285 0.15% 1,285 0.15% 0.00%
----------------------------------------------------------------------
COLOMBIA 1,199 0.14% 1,199 0.14% 0.00%
----------------------------------------------------------------------
EM 867,497 873,509 3.96%
----------------------------------------------------------------------
Phase 2:
Taiwan's LIF = 1.00
------------------------------
------------------------Index Mcap---Index---One-way
-------------------------USD mm------Weight---Index
------------------------------------Turnover
----------------------------------------------------------------------
KOREA 166,565 18.13% 0.47%
----------------------------------------------------------------------
SOUTH AFRICA 93,858(1) 10.21% 0.27%
----------------------------------------------------------------------
TAIWAN 185,584 20.20% 2.07%
----------------------------------------------------------------------
CHINA 74,150 8.07% 0.21%
----------------------------------------------------------------------
BRAZIL 66,774 7.27% 0.19%
----------------------------------------------------------------------
MEXICO 53,774 5.85% 0.15%
----------------------------------------------------------------------
INDIA 44,358 4.83% 0.13%
----------------------------------------------------------------------
RUSSIA 38,550 4.20% 0.11%
----------------------------------------------------------------------
MALAYSIA 38,967 4.24% 0.11%
----------------------------------------------------------------------
ISRAEL 38,604 4.20% 0.11%
----------------------------------------------------------------------
THAILAND 23,621 2.57% 0.07%
----------------------------------------------------------------------
CHILE 15,378 1.67% 0.04%
----------------------------------------------------------------------
INDONESIA 14,095 1.53% 0.04%
----------------------------------------------------------------------
TURKEY 11,917 1.30% 0.03%
----------------------------------------------------------------------
POLAND 12,011 1.31% 0.03%
----------------------------------------------------------------------
HUNGARY 11,281 1.23% 0.03%
----------------------------------------------------------------------
ARGENTINA 4,434 0.48% 0.01%
----------------------------------------------------------------------
CZECH REPUBLIC 5,900 0.64% 0.02%
----------------------------------------------------------------------
PERU 4,472 0.49% 0.01%
----------------------------------------------------------------------
PHILIPPINES 4,534 0.49% 0.01%
----------------------------------------------------------------------
EGYPT 2,742 0.30% 0.01%
----------------------------------------------------------------------
MOROCCO 1,844 0.20% 0.01%
----------------------------------------------------------------------
PAKISTAN 1,661 0.18% 0.00%
----------------------------------------------------------------------
VENEZUELA 1,306 0.14% 0.00%
----------------------------------------------------------------------
JORDAN 1,285 0.14% 0.00%
----------------------------------------------------------------------
COLOMBIA 1,199 0.13% 0.00%
----------------------------------------------------------------------
EM 918,865 4.14%
----------------------------------------------------------------------
Note: Data as of the close of June 2, 2004
(1) Excludes Anglo American which will be deleted from the MSCI South
Africa Index and included in the MSCI United Kingdom Index effective
as of the close of November 30, 2004 following its country
reclassification as announced on May 11, 2004.
TABLE 2: TAIWAN LIF IMPLEMENTATION IMPACT ANALYSIS ON MSCI ALL COUNTRY
FAR EAST ex JAPAN (AC FAR EAST ex JAPAN) INDEX IN 2 PHASES
----------------------------------------------------------------------
Current: Phase 1:
Taiwan's LIF = 0.55 Taiwan's LIF = 0.75
-------------------- ------------------------------
-------------------Index Mcap---Index---Index Mcap--Index---One-way
-------------------USD mm-----Weight----USD mm----Weight---Index
---------------------------------------Turnover
----------------------------------------------------------------------
KOREA 166,565 27.28% 166,565 25.79% 0.75%
----------------------------------------------------------------------
HONG KONG 122,452 20.05% 122,452 18.96% 0.55%
----------------------------------------------------------------------
TAIWAN 104,922 17.18% 140,228 21.71% 2.26%
----------------------------------------------------------------------
CHINA 74,150 12.14% 74,150 11.48% 0.33%
----------------------------------------------------------------------
SINGAPORE 61,310 10.04% 61,310 9.49% 0.27%
----------------------------------------------------------------------
MALAYSIA 38,967 6.38% 38,967 6.03% 0.17%
----------------------------------------------------------------------
THAILAND 23,621 3.87% 23,621 3.66% 0.11%
----------------------------------------------------------------------
INDONESIA 14,095 2.31% 14,095 2.18% 0.06%
----------------------------------------------------------------------
PHILIPPINES 4,534 0.74% 4,534 0.70% 0.02%
----------------------------------------------------------------------
AC FAR EAST ex
JAPAN 610,615 645,922 4.53%
----------------------------------------------------------------------
Phase 2:
Taiwan's LIF = 1.00
------------------------------
------------------------Index Mcap---Index---One-way
-------------------------USD mm------Weight---Index
------------------------------------Turnover
----------------------------------------------------------------------
KOREA 166,565 24.10% 0.85%
----------------------------------------------------------------------
HONG KONG 122,452 17.71% 0.62%
----------------------------------------------------------------------
TAIWAN 185,584 26.85% 2.57%
----------------------------------------------------------------------
CHINA 74,150 10.73% 0.38%
----------------------------------------------------------------------
SINGAPORE 61,310 8.87% 0.31%
----------------------------------------------------------------------
MALAYSIA 38,967 5.64% 0.20%
----------------------------------------------------------------------
THAILAND 23,621 3.42% 0.12%
----------------------------------------------------------------------
INDONESIA 14,095 2.04% 0.07%
----------------------------------------------------------------------
PHILIPPINES 4,534 0.66% 0.02%
----------------------------------------------------------------------
AC FAR EAST ex JAPAN 691,278 5.14%
----------------------------------------------------------------------
Note: Data as of the close of June 2, 2004
*T
For further information on MSCI indices or MSCI data, please visit
our web site at www.msci.com.
NOTICE AND DISCLAIMER
This information is the property of Morgan Stanley Capital
International Inc. (MSCI). The information may not be used to verify
or correct data, or any compilation of data or index or in the
creation of any indices. Nor may it be used in the creating, offering,
trading or promotion of any financial instruments or products. This
information is provided on an "as is" basis, and the user of this
information assumes the entire risk of any use made of this
information. It is not a recommendation to participate in any
particular trading strategy. Neither MSCI, its affiliates nor any
other party involved in the making or compiling of the information
(the "MSCI Parties") guarantees the accuracy and/or the completeness
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or implied representations or warranties, and each MSCI Party hereby
expressly disclaims all warranties of merchantability or fitness for a
particular purpose with respect to any of this information. Without
limiting any of the foregoing, in no event shall any MSCI Party have
any liability for any damages of any kind even if notified of the
possibility of such damages.
Morgan Stanley Capital International, MSCI and all other service
marks referred to herein are the exclusive property of MSCI and its
affiliates. All MSCI indices are the exclusive property of MSCI and
may not be used in any way without the express written permission of
MSCI.
Morgan Stanley, a global financial services firm and a market
leader in securities, asset management, and credit services, is the
majority shareholder of MSCI, and The Capital Group Companies, Inc., a
global investment management group, is the minority shareholder.
--30--FLB/ny*
CONTACT: MSCI
Amy Davidson, New York +1 212 762 5790
Sara Corsaro, London +44 20 7425 6660
Jammy Chan, Hong Kong +852 2848 6740
Olivia Vong, Tokyo +813 5424 5470
or
Abernathy MacGregor
Kayt Makosy/Ed Rowley, New York +1 212 371 5999
Luther Pendragon
Daniel Guthrie/Beany McLean, London +44 20 7618 9100
KEYWORD: NEW YORK SWITZERLAND INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING
SOURCE: MSCI
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18Jun04 23:08 GMT
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