MSCI raises Taiwan's weighting in 3 key indexes

Taipei, Aug. 14 (CNA) Global index provider MSCI Inc. has raised Taiwan's weighting in its three key indexes after a regular index review, which gave Taiwan's stock market a small boost Thursday.

In a statement released Thursday morning (Taipei time), MSCI said it upgraded Taiwan's weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, from 26.6 percent to 26.85 percent.

The index provider also raised Taiwan's weighting in the MSCI All-Country World Index from 3.08 percent to 3.13 percent and upped the weighting in the MSCI All-Country Asia ex-Japan Index from 29.75 percent to 30.03 percent.

It was the second consecutive quarter in which MSCI has raised Taiwan's weighting in the three indexes simultaneously, with analysts attributing the trend to the recent strong showing of Taiwan's stock market led by tech stocks during the current global AI boom.

In the MSCI Emerging Markets Index, Taiwan received the largest weighting hike of 0.25 percentage points, while India saw the steepest weighting downgrade of 0.14 percentage points, the index provider said.

Those increases partly contributed to the Taiwan Stock Exchange's (TWSE's) benchmark index, the Taiex, ending up 1.11 percent at 46,021.48 on Thursday.

In response, the TWSE said in a separate statement that after the index review, Taiwan's weighting was the highest in the MSCI Emerging Markets Index, indicating Taiwan's importance in the global capital market.

The TWSE said Taiwan boasts comprehensive semiconductor, AI server and electronics component manufacturing clusters, with many listed companies at the top of their respective industries.

That has made Taiwan's stock market a critical channel through which international investors seek to gain exposure to the country's AI development, it said.

According to the TWSE, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) has become the largest stock in the MSCI Emerging Markets Index with a weighting of 15.46 percent.

Smartphone IC designer MediaTek Inc., power management solutions provider Delta Electronics Inc., and iPhone assembler and AI server maker Hon Hai Precision Industry Co. were also ranked among the top 10 stocks in that same index, the TWSE said.

In other indexes, in which MSCI discloses changes in the index's constituents rather than their relative weightings, the index provider made changes to constituent companies from Taiwan.

In the MSCI Global Standard Indexes, MSCI added memory chip suppliers Nanya Technology Corp., Winbond Electronics Corp. and Phison Electronics Corp., lamination service provider Taiwan Union Technology Corp., and Ajinomoto build-up film (ABF) makers Nan Ya Printed Circuit Board Corp., and Kinsus Interconnect Technology Corp.

Those six stocks, however, will be removed from the MSCI Global Small Cap Indexes, MSCI said.

Six other stocks are being removed from the MSCI Global Standard Indexes and added to the MSCI Global Small Cap Indexes.

They are cement maker TCC Group Holdings Co., container cargo shipper Yang Ming Marine Transport Corp., Taiwan Business Bank, drug developer Caliway Biopharmaceuticals Co., semiconductor intellectual property provider eMemory Technology Inc., and gaming software developer International Games System Co.

After the index adjustments, Nanya Technology saw the largest weighting hike of 0.49 percentage points in the MSCI Taiwan Index from zero, while TSMC saw the steepest fall of 0.79 percentage points to 56.61 percent.

The latest index adjustments will take effect after the market closes on Aug. 31, according to MSCI.