MSCI Inc, a global index provider, has reduced Taiwan’s weighting in two major indices while leaving its weighting in another index unchanged after a regular adjustment.
In a statement released overnight, MSCI announced it has downgraded Taiwan’s weighting in the MSCI Emerging Markets Index, closely followed by foreign institutional investors, to 16.56 percent from 16.64 percent.
The index provider also reduced Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index to 18.99 percent from 19.04 percent, while leaving its weighting in the MSCI All-Country World Index unchanged at 1.74 percent.
Photo: Reuters
MSCI index reviews are conducted in February, May, August and November each year. The indices, provided in US dollar terms, help guide professional investors in adjusting their portfolios.
The latest index adjustments are set to take effect after the market closes on May 29.
Taiwan and Thailand experienced the steepest weighting cut of 0.08 percentage points in the MSCI Emerging Markets Index, while the United Arab Emirates saw the largest increase at 0.15 percentage points, MSCI said.
Weighting changes for other emerging markets in the MSCI Emerging Markets Index were limited following the index review.
MSCI decided not to add or remove any Taiwanese stocks from the MSCI Global Standard Indexes.
However, the index provider decided to add three Taiwanese stocks to the MSCI Global Small Cap Indexes: semiconductor raw material supplier Advanced Echem Materials Co (新應材), broadband connectivity solution provider EZconn Corp (光聖) and Taiwan Specialty Chemicals Corp (台特化), which produces specialty electronic-grade gases for semiconductor production.
Market analysts said the inclusion of the three companies reflects their recent gains in share prices.
Following the inclusion, shares of Advanced Echem Materials and Taiwan Specialty Chemicals surged 10 percent, the maximum daily increase, closing at NT$539 and NT$211 respectively yesterday. Shares of EZconn also rose 7.04 percent, closing at NT$463.5.
MSCI decided to remove 24 Taiwanese stocks from the MSCI Global Small Cap Indexes, including automotive electronics maker Actron Technology Corp (朋程), biotech venture capitalist Diamond Biofund Inc (鑽石生技), printed circuit board maker Dynamic Holding Co (定穎), property developer Farglory FTZ Investment Holding Co (遠雄自貿港) and touch panel producer TPK Holding Co (宸鴻).
After the review, the number of constituents in the MSCI Taiwan Index remains unchanged at 88.
Among the 88 stocks, biotech firm PharmaEssentia Corp (藥華藥) saw the largest increase, with its weighting rising by 0.02 percentage points to 0.31 percent, while telecom Taiwan Mobile Co (台灣大哥大) experienced the steepest cut, with its weighting decreasing by 0.02 percentage points to 0.49 percent.
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