Global index provider MSCI Inc yesterday lowered Taiwan’s weighting in its two major indices after its latest review, which might prompt an outflow of US$200 million in funds next quarter, the Financial Supervisory Commission (FSC) said yesterday.
The index provider trimmed Taiwan’s weighting in the MSCI Emerging Markets Index — which covers more than 800 securities across the large and mid-cap segments in 26 emerging markets — by nine basis points to 12.45 percent, commission data showed.
However, Taiwan’s weighting in the index remained in second place, only after China’s weighting of more than 40 percent, the data showed.
The company also slashed Taiwan’s weighting in the MSCI AC Asia Pacific ex-Japan Index — which captures large and mid-cap representation across four developed markets and nine emerging markets in the Asia-Pacific region — by four basis points to 14.09 percent, the data showed.
MSCI Inc kept Taiwan’s weighting in the MSCI ACWI Index, MSCI’s flagship global equity index, unchanged at 1.56 percent, the data showed.
It was the sixth consecutive review in which MSCI cut Taiwan’s weighting in the MSCI Emerging Markets Index and the MSCI All-Country Asia ex-Japan Index, the data showed.
The latest adjustment is to take effect after markets close on Sep. 1, MSCI said.
“It seemed that MSCI reduced Taiwan’s weighting as the company raised China’s and Russia’s weightings in the two indices,” Securities and Futures Bureau Chief Secretary Kao Ching-ping (高晶萍) told a news conference in New Taipei City.
As the indices are closely watched by foreign institutional investors when shaping their strategies for investing in equities and tracked by exchange-traded funds, the reduction in Taiwan’s weighting is predicted to lead to a fund outflow of US$200 million, Kao said.
It should not pose any concern for the local capital market, given that the outflow of US$200 million only accounts for 0.04 percent of total investments by foreign investors, Kao said.
Despite the decline in Taiwan’ weighting, the TAIEX yesterday gained 0.73 percent to 12,763.13 points in Taipei trading, with turnover totaling NT$236.24 billion (US$8 billion), Taiwan Stock Exchange data showed.
Separately yesterday, the FSC approved an application from Deutsche Securities Asia Ltd’s Taipei branch (德意志證券亞洲有限公司台北分公司) to terminate its local operations, with the company’s last business day scheduled to be Monday next week, Kao said.
The company’s decision came after its headquarter last year announced that it would exit the global equities business as part of a sweeping restructuring plan to improve profitability, the commission said.
The branch’s closure would not affect the local securities and futures industry, as it only had a market share of 0.18 percent in the securities business and 0.12 percent in the futures business, Kao said.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
TikTok abounds with viral videos accusing prestigious brands of secretly manufacturing luxury goods in China so they can be sold at cut prices. However, while these “revelations” are spurious, behind them lurks a well-oiled machine for selling counterfeit goods that is making the most of the confusion surrounding trade tariffs. Chinese content creators who portray themselves as workers or subcontractors in the luxury goods business claim that Beijing has lifted confidentiality clauses on local subcontractors as a way to respond to the huge hike in customs duties imposed on China by US President Donald Trump. They say this Chinese decision, of which Agence