Global index provider MSCI Inc yesterday said it has raised Taiwan’s weighting slightly in three of its indices after a quarterly review.
The move came as a surprise to many analysts tracking the local bourse who had expected MSCI to lower Taiwan’s weighting following recent selling by foreign institutional investors.
Taiwan’s weighting in MSCI’s Emerging Markets Index has been raised by 0.01 percentage points to 11.63 percent, while the country’s weighting in the All Country Asia Index (excluding Japan) has been lifted by 0.02 percentage points to 15.01 percent, MSCI said.
The index provider has also boosted Taiwan’s weighting in its All Country World Index by 0.01 percentage points to 1.29 percent.
Despite the increased weightings, the TAIEX closed down 0.8 percent yesterday to 7,887.26 points, mirroring the fall on Wall Street overnight.
Many market analysts remained concerned over an early exit by the US Federal Reserve from its massive bond-buying program and weak global demand for technology products.
Following the index review, MSCI has added Eclat Textile Co (儒鴻) to its MSCI Global Standard Indices’ Taiwan index, while removing Tung Ho Steel Enterprise Corp (東鋼).
However, it moved the steel company to the Taiwan index of the MSCI Global Small Cap Indices.
After the latest review, 13 local stocks, including power management system provider Delta Electronics Inc (台達電), chip packaging and testing services provider Advanced Semiconductor Engineering Inc (日月光) and SinoPac Financial Holdings Co (永豐金控), saw their weightings increase in the MSCI indices.
However, 14 local stocks, including Taiwan Semiconductor Manufacturing Co (台積電), United Microelectronics Corp (聯電), touch panel maker TPK Holding Co (宸鴻) and contract notebook computer maker Quanta Computer Inc (廣達) saw their weightings cut.
The index adjustments are scheduled to take effect after the market closes on Aug. 30.
MSCI holds four index reviews each year — in February, May, August and November.