Taiwan’s weightings in two indices compiled and managed by MSCI Inc have been cut after a quarterly review by the global index provider.
MSCI on Thursday released a statement on its Web site saying that Taiwan’s weighting in the MSCI Emerging Markets Index has been cut from 12.16 percent to 12.09 percent, marking the 12th consecutive quarterly reduction.
The data provider also said that Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index has been lowered from 14.3 percent to 14.2 percent, adding that its weighting in the MSCI All-Country World Index remained unchanged at 1.29 percent.
South Korea’s weighting in the MSCI Emerging Markets Index has been lowered by 0.15 percentage points, the steepest cut among the emerging markets, while China’s was raised by 0.13 percentage points and India’s by 0.29 percentage points, the statement said.
MSCI has not changed Taiwan’s constituents in either the MSCI Global Standard Indexes or MSCI Global Small Cap Indexes, maintaining the number of stocks at 90, it added.
Among the stocks whose weightings have been lowered by MSCI, smartphone maker HTC Corp (宏達電) saw the steepest cut of 0.00225 percentage points.
Eclat Textile Co (儒鴻) had its weighting raised by 0.00324 percentage points, the biggest increase.
The index adjustments will become effective after the equity market closes on Aug. 31, MSCI said.
The reduction of Taiwan’s weighting in the MSCI Emerging Markets Index, which is closely watched by foreign investors, is unlikely to prompt foreign institutional investors to sharply cut their holdings in Taiwanese stocks, Yuanta P-shares MSCI Taiwan ETF Fund manager Betty Chen (陳思蓓) said.
Taiwanese stocks provide relatively high dividend yields compared with other equity markets, making it more attractive to foreign institutional investors, she added.
Taiwan’s average dividend yield as of the end of May was 4.69 percent, up from 4.6 percent last year, the Taiwan Stock Exchange said.
From Aug. 1 to Thursday, foreign institutional investors bought a net NT$50.6 billion (US$1.61 billion) worth of shares on the local equity market and built 67,000 long-position contracts on the local futures market. The TAIEX rose 1.64 percent over the same period.
Chen said that the data showed foreign investors’ optimism toward Taiwanese equities.
Taiwan’s economic fundamentals have been improving, as evidenced by the latest export data, which is expected to support the local equity market, she added.
The TAIEX yesterday closed up 18.56 points, or 0.2 percent, at 9,150.39.
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