MSCI Inc, a global index provider, has cut Taiwan’s weighting in its Asia-Pacific excluding Japan index and its emerging markets index after a semi-annual index review.
In a statement released on Wednesday, MSCI said it was cutting Taiwan’s weighting in the MSCI Asia-Pacific Excluding Japan Index by 0.29 percentage points to 18.04 percent.
Taiwan’s weighting in the MSCI Emerging Markets Index will also be lowered by 0.19 percentage points to 11.04 percent, it said.
MSCI has also cut the weighting of South Korea in the MSCI Asia-Pacific Ex-Japan Index by 0.17 percentage points to 23.15 percent, and the country’s weighting in the MSCI Emerging Markets Index by 0.11 percentage points to 14.16 percent.
However, China’s weightings in the two indices have been raised — up 0.16 percentage points to 29.85 percent in the Asia-Pacific Ex-Japan Index and up 0.09 percentage points to 18.27 percent in the emerging markets index.
MSCI has also increased the weightings of Indonesia and Thailand in the two indices, while reducing the weightings of Malaysia and the Philippines in both indices.
The index adjustments are scheduled to take effect after markets close on May 31.
Market analysts said Taiwan’s weightings were cut because the local bourse lagged behind other markets in the first quarter.
Jenny Lai (賴惠娟), head of research at HSBC Securities Taiwan, said she expected the local bourse to remain resilient because the downgrade had been expected and its impact had already been factored in recent trading sessions.
The weighted index closed up 0.85 percent at 8,390.05 points yesterday.
The global index provider also announced that it had added contract chipmaker Vanguard International Semiconductor Co (世界先進) to the Taiwan index of the MSCI Global Standard Indices.
Before the index review, Vanguard had been included in the Taiwan index of the MSCI Global Small Cap Indices.
Shares of Vanguard rallied near the 7 percent daily limit to close at NT$35.95 yesterday.
“Foreign investors’ holding of Vanguard remains low,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
MSCI’s addition of the chipmaker could be “a good indicator for foreign investors to raise their holdings, in particular after the company reported better first-quarter results,” Tang said.
However, MSCI has also removed eight Taiwanese stocks from the index.
They include memory chipmaker Macronix International Co (旺宏電子), electronic paper display maker E Ink Holdings Inc (元太科技), Capital Securities Corp (群益證券) and touch panel manufacturer Wintek Corp (勝華).