MSCI, a global investment index closely tracked by market analysts, yesterday left the weighting of Taiwanese shares nearly unchanged in its two regional indices from a quarter earlier, the Geneva, Switzerland-based firm said in a statement.
The investment service provider trimmed Taiwan’s weighting on the MSCI Emerging Markets Index by 0.01 percentage points to 10.79 percent, while raising its weighting by the same amount to 18.41 percent in the MSCI Asia-Pacific Index excluding Japan.
The previous two quarters saw Taiwan’s weighting in both indices fall, accelerating a pullout of foreign funds as the European debt crisis unnerved investors.
The micro-adjustments were announced before the stock market’s close yesterday. The TAIEX ended down 1.69 percent at 7,869.7 on profit-taking, after rising above the psychologically critical 8,000-point mark on Wednesday, stock exchange data showed.
The latest MSCI readings are unlikely to reverse the recent rallies on the local bourse driven by the return of global hot money to Asia, JPMorgan Securities Taiwan Ltd said.
“There remains room for the TAIEX to gain, given the size of foreign fund inflows [which is] still lagging behind South Korea by 50 percent,” JPMorgan said in a statement.
Turnover has averaged NT$140 billion (US$4.73 billion) a day following the Lunar New Year holiday last month, suggesting healthy capital dynamism thanks to recovering confidence, JPMorgan said.
MSCI removed unprofitable memory chipmaker ProMOS Technologies Inc (茂德科技) from the MSCI Global Small Cap Indices. It did not add any Taiwanese stocks to the MSCI Global Standard Indices.
It raised some Taiwanese firms in the Taiwan index, such as retailers Ruentex Development Co (潤泰新) and Ruentex Industries Ltd (潤泰全), metal casing suppliers Catcher Technology Co (可成科技) and Foxconn Technology Co (鴻準), and electronics product distributor Synnex Technology International Corp (聯強國際).
Hua Nan Financial Holdings Co (華南金控) and Taiwan Cooperative Financial Holding Co (合作金控) also made the MSCI list. So did electronics component maker Lite-On Technology Corp (光寶科技), property developer Highwealth Construction Corp (興富發建設) and shoe maker Pou Chen Corp (寶成工業).
Other Taiwanese firms that saw their weighting trimmed include China Steel Corp (中鋼), handset chip designer MediaTek Inc (聯發科) and contract computer makers Compal Electronics Inc (仁寶電腦) and Wistron Corp (緯創).
The index adjustments will go into effect after the market closes on Feb. 29.