Wed, May 17, 2017 - Page 11 News List

Taiwan’s weight in indices drops

Staff writer, with CNA

MSCI Inc, a global index provider, yesterday lowered Taiwan’s weighting in two indices after a semi-annual review.

MSCI said it would cut Taiwan’s weighting in the MSCI Emerging Markets Index from 12.09 percent to 12.04 percent, after holding the weighting unchanged in the previous review.

Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index also fell from 14.14 percent to 14.11 percent, but the nation’s weighting in the MSCI All-Country World Index is to remain intact at 1.33 percent, MSCI said.

In addition, MSCI added Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) and silicon wafer supplier GlobalWafers Co (環球晶圓) to the MSCI Global Standard Indexes.

THSRC’s weighting in the MSCI indices was 0.24 percent after the stock was included in the MSCI Global Standard Indexes. The increase in THSRC’s weighting from zero was the greatest among 13 Taiwanese stocks whose weighting was increased by MSCI.

The weightings of GlobalWafers, Formosa Plastics Corp (台塑), China Steel Corp (中鋼), Standard Foods Corp (佳格) and Hotai Motor Corp (和泰汽) were also increased.

MSCI also trimmed the weightings of 15 stocks listed in Taiwan in its indices, with Formosa Chemicals & Fibre Corp (台化) suffering the steepest cut of 0.18 percentage points.

The index provider also lowered the weighting of First Financial Holding Co (第一金), metal casing maker Casetek Holdings Ltd (鎧勝), Hua Nan Financial Holding Co (華南金), Chang Hwa Commercial Bank (彰銀), IC packaging and testing firm Siliconware Precision Industries Co (矽品) and Eclat Textile Co (儒鴻), among others.

Yuanta P-shares MSCI Taiwan ETF Fund manager Betty Chen (陳思蓓) said she remains optimistic about Taiwan’s stock market outlook because of improving economic fundamentals, despite MSCI’s downward revisions of local stocks.

The local manufacturing sector’s purchasing managers’ index last month expanded for the 14th consecutive month, which was a positive sign for Taiwan’s economy, Chen said.

Still, investors should beware of the possibility of a technical pullback on the local bourse and other emerging markets in the short term, even though those markets have put up strong showings, she said.

Expectations that the US Federal Reserve will raise interest rates next month have intensified and might spur a reverse in global fund movements, she added.

India’s weighting in the MSCI Emerging Markets Index rose 0.19 percentage points, MSCI said, the fastest increase among all emerging markets.

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