Global index provider MSCI Inc yesterday cut Taiwan’s weighting on two of its indices.
MSCI lowered Taiwan’s weighting in its Emerging Markets Index by 0.07 percentage points, from 11.73 percent to 11.66 percent, and the weighting in its All-Country Asia ex-Japan Index by 0.08 percentage points, from 13.76 percent to 13.68 percent, the firm’s Web site showed.
MSCI has lowered Taiwan’s weighting in the two indices for the past four quarters.
Foreign institutional players assign great importance to MSCI’s moves when drawing up investment strategies for emerging markets.
However, MSCI kept Taiwan’s weighting in the All-Country World Index unchanged at 1.42 percent.
The adjustments are to take effect after market closing on Feb. 28.
Stock analysts had expected Taiwan’s weightings to hold steady given the nation’s stable economy and the detente in the US-China trade dispute.
Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) said that about NT$8.6 billion (US$286.31 million) of foreign funds might exit the local market, in line with the MSCI revisions.
The estimated capital outflow, accounting for 0.05 percent of overall positions held by foreign players, should have a limited effect on local shares, Tsai said, adding that MSCI cut Taiwan’s weighting to accommodate increases in China’s A-shares.
Corporate earnings, economic fundamentals and international political situations have more bearing on the performance of Taiwanese equities, she said.
The TAIEX yesterday gained 0.15 percent to close at 11,791.78 on turnover of NT$139.526 billion.
Foreign investors yesterday increased positions in local shares by a net NT$1.96 billion, while mutual funds cut holdings by a net NT$403 million and proprietary traders trimmed a net NT$489 million, Taiwan Stock Exchange data showed.
Shanghai’s SSE Composite Index yesterday ended down 0.71 percent at 2,906.07, while Shenzhen’s SZSE Component Index finished 0.7 percent lower at 10,864.32.
MSCI did not add or remove shares this time, but adjusted the weightings of 13 local shares.
The weighting of Shanghai Commercial and Savings Bank Ltd (上海商業儲蓄銀行) gained 0.01 percentage points to 0.81 percent, while LCD panel maker Innolux Corp (群創), an arm of Hon Hai Precision Industry Co (鴻海精密), lost 0.01 percentage points to 0.35 percent.
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