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

05/15/2024 06:23 PM
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CNA file photo
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Taipei, May 15 (CNA) MSCI Inc., an international index provider, has upgraded Taiwan's weighting in two of its major indexes but downgraded its weighting in another following a review in May.

In a statement released early Wednesday morning Taipei time, MSCI said it raised Taiwan's weighting in the MSCI All-Country Asia ex-Japan Index to 19.95 percent from 19.92 percent and increased the country's weighting in the MSCI All-Country World Index to 1.74 percent from 1.73 percent.

On the other hand, MSCI cut Taiwan's weighting in the MSCI Emerging Markets Index, which is closely watched by foreign institutional investors, to 17.07 percent from 17.09 percent.

According to MSCI, India enjoyed the largest weighting hike of 0.48 percentage points in the MSCI Emerging Markets Index, while China suffered the steepest cut of 0.38 percentage points.

Adjustments in the weighting of other markets appeared limited after the latest index review, MSCI said.

After the index review, MSCI added cooling solution provider Asia Vital Components Co. and electric machinery maker Fortune Electric Co. into its MSCI Global Standard Indexes.

At the same time, MSCI removed contract chipmaker Powerchip Semiconductor Manufacturing Corp., mixed-signal IC designer Parade Technologies, Ltd., and Nan Ya Printed Circuit Board Corp. from the MSCI Global Standard Indexes.

Market analysts said the move to add or remove a particular stock from the MSCI Global Standard Indexes largely reflects the gains or losses of the stock's price in recent sessions.

Since the beginning of March, shares of Asia Vita Components soared 21.24 percent before Wednesday after buying was sparked by optimism regarding the demand for cooling solutions for tech gadgets amid rising demand for AI products.

Meanwhile, shares of Fortune Electric surged 42.57 percent during the same period as investors rushed to pick up the stock due to increasing sales generated from state-owned Taiwan Power Co.'s massive investments to improve electricity grid networks around the country.

However, Asia Vita Components and Fortune Electric were removed from the MSCI Global Small Cap Index, while Powerchip Semiconductor, Parade Technologies, and Nan Ya Printed Circuit Board were added to the MSCI Global Small Cap Index.

In addition, MSCI included an additional 25 Taiwanese stocks in the MSCI Global Small Cap Index, including semiconductor equipment supplier Scientech Corp., convenience store chain owner Taiwan FamilyMart. Co., kitchen product brand Taiwan Sakura Corp. and optical fingerprint sensor solution provider Egis Technology Inc.

However, MSCI removed eight additional Taiwanese stocks from the MSCI Global Small Cap Index, such as Wei Chuan Foods Corp., electro-static discharge (ESD) solution provider Amazing Microelectronic Corp., and printed circuit board maker Apex International Co.

After the index review, the number of constituents in the MSCI Taiwan Index fell to 88 from 89.

Asia Vital Components saw its weighting rise to 0.53 percent from zero, the largest hike among the 88 constituents, while contract chipmaker Taiwan Semiconductor Manufacturing Co. saw the steepest cut of 0.2 percentage points in weighting to 47.77 percent.

The index adjustments are scheduled to become effective after the market closes on May 31.

MSCI index reviews are conducted in February, May, August and November each year, with indexes in U.S. dollar terms provided to professional investors to help guide their portfolio adjustments.

(By Jiang Ming-yan and Frances Huang)

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