Getting to grips with international stock markets: The TAIEX

Julie Brownlee, Fsp Invest, 28 Aug. 2014

Tags: taiex, what is the taiex, taiwan stock market, international stock markets, emerging stock markets,

If you take a look at emerging stock markets, there is a tendency for sectors like banks, insurers and commodity companies to dominate them.

This is the case with our very own Johannesburg Stock Exchange. Banks, insurers and mining companies make up half of the 40 biggest companies on the exchange.

But there is an emerging stock market that doesn’t stick to this prescribed concentration in sectors.

That’s the TAIEX. So what makes up the TAIEX?

Let’s take a closer look…

What is the TAIEX?

The TAIEX is the main stock market index of the Taiwan Stock Exchange. It’s most important sector is technology.

Technology is the key export market for the country. And it plays a big role in Taiwan’s economy.

Have a look at the chart below. This shows the breakdown of the sectors that make up the TAIEX…

Chart of the sectors of the TAIEX

As you can see from the chart, technology companies make up 30% of the stock market index. Industrials are also an important component of the index, making up almost 20%.

Financial companies and companies producing basic materials, such as chemical groups, also hold a lot of weight, making up over 27% combined.

The TAIEX is very sensitive to economic ups and downs

Cyclical stocks makes up a staggering 86% of the TAIEX. Cyclical stocks are shares that tend to reflect what’s going on in the wider economy.

This is a much higher proportion than you’d normally see on a stock market, even an emerging market index.

So there you have it, what the TAIEX is.

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