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Taiwan's weighting in MSCI indexes downgraded

Taiwan's weighting in MSCI indexes downgraded

Taipei, May 13 (CNA) Taiwan's weightings in the two indexes provided by MSCI Inc. have been cut after the global index provider's semi-annual index review, but market analysts said the local equity market will continue an uptrend in the mid-term amid ample liquidity. After the latest index review, Taiwan's weighting in the MSCI Emerging Markets Index has been lowered to 12 percent from 12.15 percent, while the weighting in the MSIC MSCI All-Country Asia Index ex-Japan Index has been cut to 14.27 percent from 14.49 percent. However, the MSCI has left Taiwan's weighting in the MSCI All- Country World Index unchanged at 1.31 percent. It was the 7th consecutive quarter for Taiwan's weighting to be cut in the MSCI Emerging Markets Index. In addition to the downgrade in Taiwan's weighting in the MSCI indexes, the global index provider has also adjusted the weighting of individual stocks. Hon Hai Precision Industry Co. (??), the world's largest electronics maker, witnessed its weighting boosted by 0.4 percent, the largest increase among the Taiwanese stocks in the MSCI indexes. The index adjustments are scheduled to take effect after the market closes May 29. Despite the weighting downgrade, Chen Si-bei, manager of the Yuanta/P-shares MSCI Taiwan ETF Fund, said that Taiwan's economic fundamentals remain sound, so with global liquidity at a high, it is possible for the local equity market to move higher in the mid-term. The weighted index on the Taiwan Stock Exchange closed up 0.44 percent at 9,724.11 points Wednesday, although the weighting of the local market was cut by MSCI. Chen said that losses posted by the local bourse in recent sessions largely resulted from disappointing first-quarter results and cautious second-quarter outlook for the bellwether electronics sector. However, the weighted index was still able to manage itself well above the 60-day moving average of 9,637 points in recent sessions on the back of rotational buying in the old economy and financial sectors, Chen said. She said that with the earnings season coming to an end, uncertainty in the local bourse is being removed, downward pressure is expected to fade, adding that she remained confident in the future movement of the Taiwan market. Shen Chien-hung, manager of the Taishin 2000 High Technology Equity Fund, said that investors should stay alert over possible selling right before the index adjustments become effective May 29, since it is likely that foreign investors will tune their portfolios based on the MSCI's review. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-24 04:39 GMT+08:00