TIP launches electronics index

Taiwan Index Plus Corp. (TIP, ??????), an index provider owned by the Taiwan Stock Exchange, has unveiled a new index featuring the country's major high-tech stocks, in a bid to provide a new option to investors interested in the local electronics sector.

The newly launched TIP TAIEX+ IT Elite 30 Index (TIP ITE 30) comprises 30 electronics heavyweights and will serve as an indication of the strength of Taiwan's high-tech industry, the TIP said.

Among the top 10 constituents of the TIP ITE 30 index in terms of market capitalization, Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the world's largest contract chip maker, was at the top, followed by telecom services provider Chunghwa Telecom Co. (???), integrated circuit designer MediaTek Inc. (???), power management solution provider Delta Electronics Inc. (???) and telecom operator Taiwan Mobile Co. (???).

The other five stocks were smartphone camera lens maker Largan Precision Co. (???), telecom services provider Far EasTone Telecommunications Co. (??), metal casing supplier Catcher Technology Co. (??), IC packaging and testing firm Siliconware Precision Industries Co. (??) and Industrial computer maker Advantech Co. (??), in that order.

The aggregate market capitalization of the 30 constituents of the TIP ITE index was NT$8.63 trillion as of the end of September, compared with the total NT$26.94 trillion of the local equity market, the TIP said.

Taiwan's electronics sector has been developing for the past 40 years and has a strong supply chain, the TIP said, citing the government-sponsored Industrial Technology Research Institute.

The electronics industry is the leading sector in Taiwan, developing critical components, and has helped build the country's research and development capability in terms of both original design manufacturing and original equipment manufacturing, the TIP said.

Currently, the electronics sector accounts for more than 40 percent of the companies listed on the local main board, and plays an important role in the local capital market, the TIP said.

According to the TIP, the 30 stocks in the TIP ITE index posted an annualized 11 percent return during the period 2006-2016.

In comparison, the annualized return of the stocks in the weighted index on the main board was 9 percent over the 10-year period, while the stocks in the FTSE TWSE Taiwan 50 Index, which is made up of the largest 50 cap stocks in the country, also registered 9 percent, the TIP said.

It said the statistics showed that the TIP ITE is an ideal investment tool to help investors rake in higher profits

Source: Focus Taiwan News Channel