Morgan Stanley Capital International Inc (MSCI) during its quarterly review yesterday slightly trimmed Taiwanese stocks’ weighting in the company’s Asia Pacific Index (excluding Japan) by nearly 0.1 percentage points. However, the move is expected to have little impact on investors’ appetite for local stocks.
After its second straight quarterly cut, Taiwan holds a weighting of 19.1 percent in the MSCI’s Asia Pacific Index, down from the previous 19.2 percent, according to the MSCI’s latest review of the constitutions of its indices.
The adjustment will lead to a net outflow of about US$56 million in foreign capital from the local bourse after the new MSCI indices take effect after stock markets close on Aug. 31, JPMorgan projected.
The TAIEX slipped 0.73 percent to 7,741.76 yesterday.
Overseas fund managers yesterday accelerated sales of local shares to a net of NT$11.32 billion, from net sales of NT$4.53 billion on Tuesday, the Taiwan Stock Exchange’s tallies showed.
In its quarterly review, MSCI also cut Taiwan’s weighting — by 0.04 percentage points — to 11.24 percent in the MSCI Emerging Markets Free Index, from 11.28 percent.
China saw its equity weighting lifted by 0.1 percentage point to 17.6 percent in MSCI’s Emergent Markets Index, the index compiler’s latest statistics showed.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, saw its weighting lowered by the deepest rate cut of 0.06 percentage points in the MSCI Emerging Markets Free Index and 0.011 percentage points in the Asia Pacific Index.
Computer maker Asustek Computer Inc (華碩電腦) also saw its weighting reduced, by 0.03 percentage points in the Emerging Markets Free Index and 0.05 percentage points in the Asia Pacific Index.
Other stocks that saw their weighting downgraded in the Emerging Markets Free Index included MediaTek Inc (聯發科), MStar Semiconductor Inc (晨星半導體), Chicony Electronics Co (群光電子) and China Development Financial Holding Corp (中華開發金控). CMC Magnetics Corp (中環) and Unimicron Technology Corp (欣興電子) were also downgraded.
MSCI increased the weighting of Synnex Technology International Corp (聯強國際), Asia’s biggest distributor of electronics, by 0.02 percentage points and 0.04 percentage points in the Emerging Markets Free Index and Asia Pacific Index respectively.
Stocks that saw their weighting increased were Capital Securities Corp (群益證券), Evergreen Marine Corp (長榮海運), Wistron Corp (緯創), Catcher Technology Co (可成科技), Epistar Corp (晶元光電), Highwealth Construction Corp (興富發建設) and Novatek Microelectronics Corp (聯詠科技).
Hon Hai Precision Industry Co Ltd (鴻海精密) was included in the MSCI Islamic Index for the first time, making the world’s largest electronics contract manufacturer the second Taiwanese firm to join the index after TSMC.