Taiwan's weighting in two indexes compiled and managed by MSCI Inc. has been cut after the global index provider completed a semi-annual index review.
In a statement posted on its website overnight, MSCI said Taiwan's weighting in the MSCI Emerging Markets Index, which is closely watched by foreign investors, has been lowered to 12.12 percent from 12.20 percent.
It was the 13th consecutive quarter in which Taiwan's weighting in the index has been lowered.
In addition, Taiwan's weighting in the MSCI All-Country Asia ex-Japan Index was lowered to 14.28 percent from 14.39 percent, but its weighting in the MSCI All-Country World Index remained unchanged at 1.36 percent, according to the website.
The index adjustments will become effective after the stock market closes on Nov. 30, MSCI said.
After the weighting cut by MSCI, the weighted index on the Taiwan Stock Exchange only closed down 0.10 percent at 8,931.03 in trading Tuesday, with analysts saying that the weighting downgrade had been widely anticipated by the market.
Chen Si-bei (???), manager of the Yuanta P-shares MSCI Taiwan ETF Fund, said shares in Taiwan have been boosted by signs of improvement in Taiwan's economy, citing a 9.4 percent year-on-year increase in the country's exports in October, beating expectations of a 1.9 percent rise.
But Chen warned that investors should beware of the possibility of rising protectionism in the United States after Donald Trump won the U.S. presidential election on Nov. 8, which could affect global trade.
According to Chen, South Korea suffered the steepest weighting cut of 0.11 percentage points in the MSCI Emerging Markets Index, while the weighting of China in the index gained 0.09 percentage points and the weighting of India rose 0.19 percentage points, the largest gains among emerging markets in the index.
Among individual Taiwanese companies, MSCI added PC brand Micro-Star International Co. (????) to the MSCI Global Standard Indexes while removing battery provider Simplo Technology Co. (????).
The global index provider raised Micro-Star's weighting by 0.36399 percentage points, the most significant upgrade among the Taiwanese stocks in its indexes, helping propel it to the new index, MSCI said.
Computer keyboard maker Chicony Electronics Co. (??) and smartphone brand HTC Corp. (???) were among several other Taiwanese stocks that had their weightings upgraded.
MSCI cut the weighting of Simplo by 0.17206 percentage points, the steepest reduction among the stocks suffered a weighting reduction.
Among other Taiwanese companies that saw their weightings fall were contract electronics maker Pegatron Corp. (??) and contract chip maker United Microelectronics Corp. (??).
Source: Focus Taiwan News Channel