Wed, Nov 15, 2017 - Page 12 News List

MSCI raises the nation’s weightings

By Crystal Hsu  /  Staff reporter

Global index provider MSCI Inc yesterday raised the nation’s weighting in two of its indices after a quarterly review, boding well for the TAIEX, which has been above 10,000 points for more than four months.

The closely watched firm upgraded Taiwan’s weighting on the MSCI Emerging Markets Index by 0.08 percentage points to 11.79 percent and raised its share on the MSCI All-Country Asia ex-Japan Index by 0.06 percentage points to 13.6 percent.

The latest adjustments are to take effect after the local equity market closes on Nov. 30, MSCI said.

That might prompt foreign institutional investors to follow suit and increase their holdings of local shares, analysts said.

“Taiwan received the biggest boost this time, with medium and large-cap firms gaining favor, while small firms lost some,” Yuanta P-shares MSCI Taiwan ETF Fund manager Betty Chen (陳思蓓) said.

Macronix International Co Ltd (旺宏電子), which supplies read-only-memory chips to Japan’s Nintendo Co, is to see its weighting grow 0.08 percentage points, while Merida Industry Co (美利達), the nation’s No. 2 bicycle maker, is to drop by 0.16 percentage points, MSCI said.

Foreign investors are keen about local technology plays this year, which have benefited from a better-than-expected global economy.

Taiwanese firms supply chips, camera lenses, casings, touchpanels and other electronic components used in smartphones, notebook computers, connected vehicles and Internet-of-Things devices.

It was the second straight quarter that MSCI revised up the weighting of Taiwanese shares after the domestic economy expanded 3.11 percent in the third quarter.

The TAIEX yesterday closed up 0.03 percent at 10,687.18 on turnover of NT$123.962 billion, Taiwan Stock Exchange data showed, ending seven consecutive sessions of falls.

JPMorgan Asset Management Ltd (摩根投信) said the launch of the iPhone X might bolster the earnings of firms in its supply chain and the MSCI weighting adjustments lent support to the view.

The TAIEX has been above the 10,000-point mark since May 23, with net purchases by foreign investors totaling NT$254.19 billion (US$8.42 billion) so far this year, JPMorgan said.

Sales of the iPhone and other consumer electronics devices might gain further traction in the buildup to Christmas and the Lunar New Year, allowing the local stock market rally to extend into the first quarter of next year, it said.

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