Taiwan’s weighting in two indices compiled and managed by MSCI Inc has been cut after the global index provider completed a semi-annual index review.
In a statement posted on its Web site on Monday, MSCI said Taiwan’s weighting in the MSCI Emerging Markets Index, which is closely watched by foreign investors, has been lowered to 12.12 percent from 12.2 percent.
It was the 13th consecutive quarter in which Taiwan’s weighting in the index has been lowered.
In addition, Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index was lowered to 14.28 percent from 14.39 percent.
Its weighting in the MSCI All-Country World Index remained unchanged at 1.36 percent, according to the Web site.
The index adjustments are to become effective after the stock market closes on Nov. 30, MSCI said.
The weighting downgrade appeared to have little effect on the local bourse yesterday, with the TAIEX edging down 0.1 percent to close at 8,931.01 points. Analysts said the cuts had been widely anticipated.
Yuanta P-shares MSCI Taiwan ETF Fund manager Betty Chen (陳思蓓 said that local shares have received a boost from signs that the economy is improving, citing a 9.4 percent year-on-year increase in exports last month, outpacing expectations of a 1.9 percent rise.
However, Chen said that investors should be wary of a potential rise in protectionism in the US after the election of Republican presidential candidate Donald Trump, which could affect global trade.
South Korea suffered the steepest weighting cut of 0.11 percentage points in the MSCI Emerging Markets Index, Chen said, while China’s weighting rose 0.09 percentage points and India posted the biggest increase of 0.19 percentage points.
The index provider also adjusted the weighting of individual Taiwanese stocks.
PC brand Micro-Star International Co (微星科技) was removed from the MSCI Global Small Cap Indexes and added to the MSCI Global Standard Indexes.
Analysts said that the inclusion of Micro-Star to the MSCI Standard Indexes reflected a nearly 38 percent increase in its stock price during the third quarter, driven by a robust bottom line.
Micro-Star posted a third-quarter net profit of NT$1.62 billion (US$50.83 million), up 74 percent from a quarter earlier and 74 percent from a year earlier.
Its earnings per share of NT$1.91 in the third quarter hit a new quarterly high, aided by the company’s efforts to penetrate the gaming PC market, which commands a higher profit margin.
Micro-Star shares fell 3.99 percent yesterday to NT$83.40 in Taipei trading.
The index provider also removed battery provider Simplo Technology Co (新普科技) from the MSCI Global Standard Indexes and included it in the MSCI Global Small Cap Indexes.
Shares of Simplo, one of Apple Inc’s suppliers, fell 2.99 percent to end at NT$91.10 on the over-the-counter market.
MSCI added nine other Taiwanese stocks to the MSCI Global Small Cap Indexes, including wireless communications device provider Arcadyan Technology Corp (智易), food manufacturer Charoen Pokphand Enterprise (Taiwan) Co (卜蜂), China General Plastics Corp (華夏), container shipper Wan Hai Lines Ltd (萬海) and automatic semiconductor tester printed circuit board (PCB) maker Chunghwa Precision Test Tech Co (精測).
It also removed 26 other Taiwanese stocks from the MSCI Global Small Cap Indexes after the index review.
Among them were imaging solution provider Altek Corp (華晶科), PC peripherals device maker BenQ Materials Corp (明碁材), flexible PCB maker Career Technology (Mfg) Co (嘉聯益), Chia Hsin Cement Corp (嘉泥) and gaming software developer XPEC Entertainment Inc (樂陞科技), which is under investigation for fraud after a botched tender offer.
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