Global index provider MSCI Inc yesterday announced that it would raise Taiwan’s weighting in two of its major indices and trim it in another one following a quarterly index review.
The company would increase Taiwan’s weighting by 0.01 percentage points to 1.74 percent in the MSCI All Country World Index and by 0.03 percentage points to 19.95 percent in the MSCI All-Country Asia ex-Japan Index.
It would trim Taiwan’s proportion by 0.02 percentage points to 17.7 percent in the MSCI Emerging Markets Index.
Photo: CNA
The tweaks, which would take effect at the end of the trading session on May 31, seek to capture the latest pulse of the markets, the Taiwan Stock Exchange said in a statement.
MSCI said it would add fast-growing cooling solutions provider Asia Vital Components Co (奇鋐科技) and electric machinery supplier Fortune Electric Corp (華城電機) to its basket of local shares, but ditch Powerchip Semiconductor Manufacturing Corp (力積電), display chip supplier Parade Technologies Ltd (譜瑞) and Nan Ya Printed Circuit Board Corp (南亞電路板).
The three have lagged behind the TAIEX due to their lackluster business outlooks.
By contrast, shares in Asia Vital and Fortune Electric would draw more attention and climb higher on the back of fund inflows, analysts said.
The changes aim to reflect the local bourse and Taiwanese corporations, the exchange said.
The TAIEX yesterday closed up 0.77 percent at a record 21,147.21, as capital funds at home and abroad picked up local technology shares to take advantage of booming artificial intelligence (AI) applications.
Taiwan is home to the world’s largest suppliers of advanced chips, high-end servers, storage and memory devices used in AI infrastructure and applications.
Foreign institutional players yesterday bought a net NT$26.69 billion (US$826 million) of local shares, while mutual funds increased their stakes by another NT$1.8 billion, although proprietary traders cut their holdings by NT$149 million, exchange data showed.
MSCI said that it would lower the weighting of Taiwan Semiconductor Manufacturing Co (台積電) by 0.2 percentage points to 47.77 percent given its steep rally this year.
Shares of the sole chipmaker for Apple Inc’s iPhone series and Nvidia Corp’s AI chips yesterday rose 1.69 percent to NT$839, exchange data showed.
Shares in the Hsinchu-based firm have risen 41.48 percent so far this year, underpinning 60 percent of the TAIEX’s gain, data showed.
MSCI is also to add property developers Yungshin Construction and Development Co (永信建) and Crowell Development Corp (皇普), real estate agency Hiyes International Co (海悅) and elevator maker Golden Friends Corp (崇友實業) to its small-cap basket.
The move comes after the local market’s capitalization spiked 17 percent to NT$6.64 trillion as of Monday from NT$5.68 trillion at the end of last year, the Financial Supervisory Commission said.
That suggested an average of NT$745,000 in capital gains for 12.78 million individual investors in Taiwan, the commission said.
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