Sat, Aug 12, 2017 - Page 12 News List

MSCI raises weighting of two Taiwanese indices

Staff writer, with CNA

Global index provider MSCI Inc has raised Taiwan’s weighting in two of its indices after a quarterly review.

In a statement posted on its Web site on Thursday, the company said that Taiwan’s weighting in the MSCI Emerging Markets Index, which is closely watched by foreign investors, was raised from 12.07 percent to 12.09 percent.

MSCI has also upgraded Taiwan’s weighting on the MSCI All-Country Asia ex-Japan Index by 0.01 percentage points to 14.01 percent, it said.

The move was the first upgrade of Taiwan’s weighting in the two indices since the third quarter of 2013, when MSCI raised the nation’s weighting in the MSCI Emerging Markets Index by 0.01 percentage points and 0.02 percentage points in the MSCI All-Country Asia ex-Japan Index.

However, MSCI said that it has left Taiwan’s weighting in the MSCI All-Country World Index unchanged at 1.39 percent.

The latest adjustments will take effect after the local equity market closes on Aug. 31, MSCI said.

Market analysts said that the upgrades reflects a strong showing by local equities in recent sessions, in particular after the TAIEX breached the 10,000-point mark in the middle of May for the first time in 17 years and continued to move higher in June and last month.

The TAIEX has risen 4.64 percent since the beginning of May.

The index yesterday appeared resilient amid rising political tensions between the US and North Korea, losing only 0.17 points to close at 10,329.57 points.

Taiwan’s weighting upgrade of 0.02 percentage points in the MSCI Emerging Markets Index was the highest among all emerging markets covered by the index, Yuanta P-shares MSCI Taiwan ETF Fund manager Betty Chen (陳思蓓) said.

Chen said that Russia, Qatar, Mexico and South Korea suffered the steepest cuts in the index of 0.01 percentage points each.

She said that the upgrade of Taiwan’s weighting is expected to help the main board remain above the 10,000-point mark, while a continued recovery in the local economy has also paved the way for a stronger equity market.

However, Chen said investors should pay close attention to rising geopolitical tensions, as Pyongyang has said it is planning to fire four ballistic missiles into waters off the US territory of Guam and US President Donald Trump has maintained his aggressive stance against North Korea.

She said that non-economic factors such as these could continue to spur selling in Taiwan and other emerging markets in the short term.

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