MSCI Inc yesterday said it was raising Taiwan’s weighting in its emerging markets index, but cutting its weighting in its Asia-Pacific excluding Japan index.
After a quarterly review, the global investment index provider raised Taiwan’s weighting in the MSCI Emerging Markets Index by 0.0017 percentage points, ending a run of five consecutive cuts.
However, it lowered Taiwan’s weighting in the MSCI Asia-Pacific excluding Japan Index by 0.012 percentage points, the second consecutive cut in that index.
Meanwhile, China’s weighting in the MSCI Emerging Markets Index was raised by 0.006 percentage points, but its weighting in the MSCI Asia-Pacific Index (excluding Japan) was cut by 0.014 percentage points.
For South Korea, its weighting in both the MSCI Emerging Markets Index and the MSCI Asia-Pacific excluding Japan Index were cut by 0.015 percentage points and 0.048 percentage points respectively.
According to MSCI, First Steamship Co (益航), one of Taiwan’s leading bulk carriers, had been removed from the Taiwan index of the MSCI Global Small Cap Indices, but no Taiwanese stocks had been added to that particular index.
Shares in First Steamship closed down 2.21 percent at NT$31.
“The deletion from the MSCI indices served as a catalyst for the sell-off,” Hua Nan Securities (華南永昌證券) analyst Henry Miao (苗台生) said. “It was no surprise that investors rushed to dump the stock soon after the local bourse opened.”
Miao said there had been concerns over demand for bulk cargo shipping as the global economy slowed down and many investors simply used the MSCI removal as an excuse to sell.
Under the MSCI indices, MSCI raised the weightings of 10 Taiwanese stocks in the Taiwan index, but cut the weightings for 11 local firms after the quarterly review.
Among the 10 stocks given higher weightings in the index are touch panel maker TPK Holding Co (宸鴻), Taishin Financial Holding Co (台新金控), computer and electronics component distributor Synnex Technology International Corp (聯強), semiconductor distributor WPG Holdings Ltd (大聯大) and Highwealth Construction Corp (興富發).
The other five are chipmaker Macronix International Co (旺宏), engineering firm CTCI Corp (中鼎), display driver IC supplier Novatek Microelectronics Corp (聯詠), home appliance manufacturer Teco Electric & Machinery Co (東元) and industrial automation service provider Advantech Co (研華).
However, United Microelectronics Corp (聯電), the world’s second-largest contract chipmaker, saw its weighting slashed in the indices, along with China Development Financial Holding Co (開發金控), Yuanta Financial Holdings Co (元大金控), Fubon Financial Holding Co (富邦金控) and China Life Insurance Co (中壽).
The other firms that suffered weighting cuts are IC packaging and testing service provider Advanced Semiconductor Engineering Inc (日月光), power supply system maker Delta Electronics Inc (台達電), Evergreen Marine Corp (長榮海運), electronics component supplier Lite-On Technology Corp (光寶), notebook computer maker Quanta Computer Inc (廣達) and control IC firm Phison Electronics Corp (群聯).
The adjustments are scheduled to take effect after the local bourse closes on Aug. 31, MSCI said.