Weight­ing in two MSCI in­dexes cut

The China Post - - TAIWAN BUSINESS -

Tai­wan’s weight­ing in the two in­dexes pro­vided by MSCI Inc. have been cut af­ter the global in­dex provider’s quar­terly in­dex re­view, but mar­ket an­a­lysts said that the changes are mi­nor and un­likely to have much im­pact on the lo­cal eq­uity mar­ket as a whole.

Ac­cord­ing to the latest in­dex ad­just­ments an­nounced by MSCI overnight, Tai­wan’s weight­ing in the MSCI Emerg­ing Mar­kets In­dex has been cut by 0.04 per­cent­age points to 12.5 per­cent. It was the eighth con­sec­u­tive quar­ter in which MSCI low­ered Tai­wan’s weight­ing in the emerg­ing mar­ket in­dex.

Tai­wan also wit­nessed its weight­ing in the MSCI All-Coun­try Asia In­dex exJa­pan In­dex cut by 0.04 per­cent­age points to 14.83 per­cent, while Tai­wan’s weight­ing in the MSCI All- Coun­try World In­dex has been raised to 1.27 per­cent from 1.26 per­cent.

Af­ter the quar­terly re­view, MSCI has de­cided not to add or re­move any Tai­wanese stocks from ei­ther the MSCI Global Stan­dard In­dex or the MSCI Global Small Cap In­dex.

Alex Huang, an an­a­lyst with Mega In­ter­na­tional In­vest­ment Ser­vices Corp., said that the mag­ni­tude of the down­grade in the MSCI Emerg­ing Mar­kets In­dex and MSCI All-Coun­try Asia In­dex ex-Ja­pan In­dex was small and that lit­tle im­pact on the lo­cal mar­ket is ex­pected.

Huang said the de­ci­sion on no change for Tai­wanese con­stituents in the in­dexes is un­likely to af­fect the lo­cal mar­ket, ei­ther.

The weighted in­dex on the Tai­wan Stock Ex­change closed down 0.07 per­cent at 8,305.64 Fri­day af­ter the in­dex changes.

As for in­di­vid­ual stocks, MSCI has cut the weight­ing of Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC) by 0.06 per­cent­age points in its in­dexes, the steep­est re­duc­tion among the lo­cal stocks that suf­fered a cut in weight­ing af­ter the quar­terly in­dex re­view.

Fol­lowed by the cut, shares of TSMC, the most heav­ily weighted stock in the lo­cal mar­ket, fell 1.56 per­cent to close at NT$126.00 (US$3.92) and the down­turn led the lo­cal semi­con­duc­tor sec­tor to trend lower 1.28 per­cent at Fri­day’s close.

How­ever, Pe­ga­tron Corp., a con­tract notebook com­puter maker that has en­tered the sup­ply chain of Ap­ple Inc. to as­sem­ble the iPhone, got a boost from a MSCI de­ci­sion to raise the stock’s weight­ing in its in­dexes by 0.16 per­cent­age points, the largest in­crease among the lo­cal stocks to be up­graded by the in­ter­na­tional in­dex provider.

Shares of Pe­ga­tron closed up 2.51 per­cent Fri­day to close at NT$89.70, out­per­form­ing the broader mar­ket.

The latest in­dex ad­just­ments by MSCI are sched­uled to go into ef­fect af­ter the mar­ket close Aug. 31.

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