Global index provider MSCI Inc has raised Taiwan’s weighting in three of its indices after a quarterly review, which might lead to more fund inflows into the nation.
MSCI is raising Taiwan’s weighting on the MSCI All-Country World Index from 1.3 to 1.31 percent, on the MSCI All-Country Asia ex-Japan Index from 12.76 to 12.78 percent and on the MSCI Emerging Markets Index from 10.99 to 11.02 percent, effective after the market closes on Feb. 28.
The adjustments are expected to boost fund inflows by NT$3.9 billion (US$126.5 million), because exchange-traded funds, which track the MSCI indices, would buy more local shares to stay in line with the index’s performance, Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told a news conference in Taipei.
Net foreign fund inflows reached US$3.01 billion last month, pushing the accumulated net foreign fund inflows to US$200.53 billion as of last month, Financial Supervisory Commission data showed.
Taiwan’s increased weighting on the MSCI All-Country Asia ex-Japan Index and the MSCI Emerging Markets Index ends the cycle of downgrades that had been ongoing since the first quarter of last year, JPMorgan Asset Management Taiwan Ltd (摩根資產管理) said yesterday.
However, the local equity market’s outlook remains tied to the US-China trade spat, it said.
MSCI also added Shanghai Commercial and Savings Bank Ltd (上海商業儲蓄銀行) to its Global Standard Indices.
After the announcement, Shanghai Commercial shares jumped 2.05 percent to close at NT$44.7 on the local bourse.
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