MSCI cuts Taiwan’s weighting in two indexes

Taipei, Global index provider MSCI Inc. has cut Taiwan's weighting in its Emerging Markets Index and the All-Country Asia ex-Japan Index, while leaving the country's weighting in the All-Country World Index unchanged.

The weighting changes came after MSCI completed its quarterly index review.

According to data compiled by Yuanta Securities Investment Trust Co., MSCI lowered Taiwan's weighting in the Emerging Markets Index, which is closely watched by foreign institutional investors when shaping strategies for emerging markets, to 11.71 percent from 11.79 percent.

MSCI also lowered Taiwan's weighting in the All-Country Asia ex-Japan Index from 13.50 percent to 13.39 percent, but the country's weighting in the All-Country World Index remained unchanged at 1.35 percent.

Lin Liang-yi (???), manager of the Yuanta P-shares MSCI Taiwan ETF Fund, said Taiwan's 0.08 percentage point decline was the steepest among the markets covered by the MSCI Emerging Markets Index, while China posted the biggest increase of 0.37 percentage points.

China's increased weighting came after MSCI included more Chinese-yuan denominated A shares in its index, and it led to weighting cuts not only for Taiwan but many other emerging markets.

Lin said the cuts in Taiwan's weightings in the MSCI indexes were widely expected and were therefore not likely to have much of an effect on Taiwan's stock market.

Despite the index adjustments for Taiwan, no individual Taiwanese stocks were removed from or added to the MSCI Global Standard Indexes and the MSCI Global Small Cap Indexes.

But some had their weightings changed in the MSCI Taiwan Index comprised of Taiwanese stocks.

Data compiled by J.P. Morgan Asset Management shows that Shinkong Financial Holding Co. had its weighting in the MSCI Taiwan Index raised by MSCI by 0.02033 percentage points, the largest increase among Taiwanese stocks.

Others that had their weightings increased in the index were DRAM maker Nanya Technology Corp. (0.00517 percentage points) and computer peripheral supplier Chicony Electronics Co.(0.00173 percentage points).

IC packaging and testing services provider ASE Technology Holding Co. suffered the steepest weighting cut of 0.01609 percentage points, followed by Yuanta Financial Holding Co. (0.00473 percentage points) and IC desinger MediaTek Inc. (0.00304 percentage points).

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

Source: Focus Taiwan News Channel