Taiwan’s weightings in three indices managed by MSCI Inc have been cut after a semi-annual review by the global index provider.
In a statement released by MSCI on Thursday, Taiwan’s weighting in the MSCI Emerging Markets Index was lowered by 0.43 percentage points to 11.91 percent. It was the ninth consecutive quarter in which Taiwan’s weighting in that MSCI index has been cut.
MSCI also reduced Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index by 0.6 percentage points to 13.93 percent and trimmed the nation’s weighting in the MSCI All-Country World Index by 0.02 percentage points to 1.21 percent.
As for individual stocks, MSCI increased the weighting of a dozen Taiwanese stocks, including Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電), MediaTek Inc (聯發科), Hon Hai Precision Industry Co (鴻海), First Financial Holding Co (第一金控) and E.Sun Financial Holding Co (玉山金控).
Hon Hai, the world’s largest contract electronics maker, saw its weighting rise by 0.3 percentage points, the biggest hike among the 12 stocks.
However, MSCI cut the weightings in its Emerging Markets Index of 10 other Taiwanese stocks, such as TPK Holding Co (宸鴻), China Motors Corp (中華汽車), CTCI Corp (中鼎工程), Epistar Corp (晶電) and Kinsus Interconnect Technology Corp (景碩).
Biotech firm OBI Pharma Inc (台灣浩鼎) was added to the MSCI Global Standard Indexes, while nine others, including TPK, China Motors and CTCI were removed.
Analysts said the cuts in Taiwan’s weightings reflected MSCI’s decision to add 14 US-traded Chinese stocks to its largest indices from online retailer Alibaba Group Holding Ltd (阿里巴巴) to search engine Baidu Inc (百度). Other American depositary receipts (ADR) of Chinese stocks being added to the MSCI China Small Cap Index include Sina Corp (新浪), Changyou.com Ltd (暢遊), Bitauto Holdings Ltd (易車網), Cheetah Mobile Inc (獵豹移動) and Renren Inc (人人).
The shift boosted China’s weighting in the MSCI Emerging Markets Index by 1.74 percentage points to 25.64 percent.
While Chinese ADRs are being added to the biggest MSCI gauges, mainland-traded shares are still being left out of them.
The index provider said in June that it would hold off on including them because of their inaccessibility to foreign investors.
In all, following its latest semi-annual equity index review, 21 foreign-listed stocks from markets including Hong Kong, Israel and the Netherlands are being added to the major benchmark gauges, according to MSCI.
Forty-five overseas-traded companies will be in small-cap indices, it said.
The latest index adjustments are scheduled to take effect after the close of trading on Nov. 30.
Additional reporting by Bloomberg
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