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Cut in Taiwan's MSCI weighting takes effect after market close Friday

Cut in Taiwan's MSCI weighting takes effect after market close Friday

Taipei, May 29 (CNA) The weighting of Taiwan stocks in two indices will be lowered with effect from Friday after the market close, as Morgan Stanley Capital International (MSCI) carries out quarterly adjustments of its indices. Earlier this month, MSCI said Taiwan's weighting in its Emerging Markets Index will be cut to 12 percent from 12.15 percent, while the weighting in the All-Country Asia Index ex-Japan Index will be lowered to 14.27 percent from 14.49 percent, effective May 29. However, the MSCI left Taiwan's weighting in its All-Country World Index unchanged at 1.31 percent. It is the seventh consecutive quarter that Taiwan's weighting in the MSCI Emerging Markets Index has been lowered. Since MSCI's indices are usually followed closely by foreign institutional investors, they may cut their holdings in the local bourse late in Friday's trading session, which would boost turnover, analysts said. As of 1:06 p.m., the weighted index on the Taiwan Stock Exchange had declined 0.01 percent to 9,711.71 points on turnover of NT$79.80 billion (US$2.60 billion). Despite the MSCI's downgrade of Taiwan's overall weighting, it raised its weighting for Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, by 0.4 percentage points, the biggest upward revision among the local stocks. The other Taiwanese stocks that have been upgraded in the MSCI weightings are integrated circuit designer MediaTek Inc. (???), PC vendor Acer Inc. (??), flat panel maker Innolux Corp. (??), contract shoe maker Pou Chen Corp. (??) and SinoPac Financial Holdings Co. (???). However, the world's largest contract chip maker Taiwan Semiconductor Manufacturing Co. (???), Chang Hwa Commercial Bank (??) and shipper Wan Hai Lines Ltd. (??) are among those whose stock weightings will be downgraded. MSCI has added two Taiwanese stocks to its Global Standard Index -- metal casing supplier Casetek Holdings Ltd. (??) and shoe maker Feng Tay Enterprises Co. (??) -- and has dropped seven. The seven are PC maker Clevo Co. (??), Far Eastern Department Stores Ltd. (??), biotech firm ScinoPharm Taiwan Ltd. (??), printed circuit board (PCB) supplier Unimicron Technology Corp. (??), power cable manufacturer Walsin Lihwa Corp. (??), property developer Farglory Land Development Co. (??), and Formosa International Hotels Corp. (??). (By Lo Hsiu-wen and Frances Huang)


Updated : 2021-09-25 16:53 GMT+08:00