MSCI cuts Taiwan weighting in 2 indexes, raises it in another

08/12/2022 03:29 PM
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CNA file photo
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Taipei, Aug. 12 (CNA) MSCI Inc., a global index provider, has cut Taiwan's weighting in two of its major indexes, but raised it in a third one, after a quarterly review.

According to a statement released Friday, MSCI said Taiwan's weighting in the MSCI Emerging Markets Index, which is closely watched by foreign institutional investors, has been cut by 0.07 percentage points to 14.75 percent.

It was the steepest cut among the emerging markets in that index, and Taiwan's weighting in the MSCI All-Country Asia ex-Japan Index was also lowered, from 16.56 percent to 16.48 percent.

The index provider, however, raised Taiwan's weighting slightly in the MSCI All-Country World Index, from 1.65 percent to 1.66 percent.

After the quarterly index review, no Taiwanese stocks were added to or removed from the MSCI Global Standard Indexes or the MSCI Global Small Cap indexes, MSCI said in the statement.

In the Asia Pacific region, only stocks in China, South Korea and Thailand were added to or removed from the MSCI Global Standard Indexes and the MSCI Global Small Cap indexes, according to the statement.

China saw the biggest hike in weighting in the MSCI Emerging Markets Index, with a 0.27 percentage point raise, followed by Qatar with an increase of 0.03 percentage points.

In the MSCI Taiwan Index, the number of constituents remained at 87 after the quarterly index adjustments.

Before the latest index adjustments were unveiled, market analysts had forecast that some biotech and old economy stocks in Taiwan would have been added into the MSCI Taiwan Index, given their recent gains.

High-speed transmission stocks and semiconductor stocks, meanwhile, were expected to be removed, as rising interest rates had dwarfed their dividend yields, pushing their shares lower.

On Friday, MSCI said it has adjusted the weighting of 19 stocks in the MSCI Taiwan Index, with China Airlines (CAL) seeing the biggest hike of 0.01 percentage points, while metal casing supplier Catcher Technology Co. had the steepest cut of 0.02 percentage points.

The index adjustments are scheduled to take effect after the Taiwan market closes on Aug. 31.

MSCI index reviews are conducted in February, May, August and November each year.

According to the analysts, the latest MSCI index adjustments had little effect on the Taiex, the weighted index on the Taiwan Stock Exchange, which continued to gain Friday, rising 0.60 percent to close at 15,288.97, after a 1.73 percent surge the previous day.

(By Jeffrey Wu and Frances Huang)

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