Taiwan weighting in three major indices raised: MSCI

THIRD CONSECUTIVE INCREASE: Analysts attributed the upgrade to the tech-heavy Taiwan stock market’s strong showing on the back of the artificial intelligence boom

Global index provider MSCI Inc has raised Taiwan’s weighting in three of its major indices after a regular index review.

MSCI has upgraded Taiwan’s weighting in the MSCI Emerging Markets Index, the most closely watched by foreign institutional investors, from 28.86 percent to 29.01 percent, it said in a statement.

The index provider has also raised Taiwan’s weighting in the MSCI All-Country World Index from 3.25 percent to 3.28 percent and hiked the weighting in the MSCI All-Country Asia ex-Japan Index from 32.72 percent to 32.83 percent.

A smartphone screen displays the TAIEX and prices of several technology shares in front of an electronic stock board in Taipei on Tuesday.

Photo: CNA

It was the third consecutive quarter in which MSCI has raised Taiwan’s weighting in the three indices simultaneously. Analysts attributed the upgrade to the recent strong showing by Taiwan’s tech-heavy stock market amid the global artificial intelligence (AI) boom.

In the MSCI Emerging Markets Index, India received the largest weighting upgrade of 0.17 percentage points, while China suffered the steepest downgrade of 0.13 percentage points, MSCI said.

In the MSCI Global Standard Indexes, it added three Taiwanese stocks: IC substrate maker Kinsus Interconnect Technology Corp (景碩), Nan Ya Printed Circuit Board Corp (南亞電路板) and copper-clad laminate supplier Taiwan Union Technology Corp (台燿).

The three stocks have been removed from the MSCI Global Small Cap Indexes.

MSCI had decided to add the three companies to the MSCI Global Standard Indexes in the August index review, but the trio’s soaring share prices led the Taiwan Stock Exchange to list them as “disposition stocks,” which faced trading restrictions, so the inclusion had been postponed until this month’s index review.

MSCI has deleted leasing and financial service provider Chailease Holding Co (中租控股), electronics paper supplier E Ink Holdings Inc (元太科技), connector producer Lotes Co (嘉澤) and container cargo shipper Wan Hai Lines Ltd (萬海航運) from the MSCI Global Standard Indexes, but added Chailease, E Ink and Lotes to the MSCI Global Small Cap Indexes.

MSCI has also added 15 Taiwanese stocks to the MSCI Global Small Cap Indexes, including server maker AIC Inc (營邦), motherboard supplier ASRock Industrial Computer Corp (東擎) and Web communication devices producer Browave Corp (波若威).

Nine additional Taiwanese stocks have been removed from the MSCI Global Small Cap Indexes, including fine carbon material provider China Steel Chemical Co (中碳), offshore maritime equipment supplier Dong Fang Offshore Co (東方風能), environmental protection solution provider ECOVE Environment Corp (崑鼎) and elevator manufacturer GFC Ltd (崇友).

After the index adjustments, Taiwan Union Technology enjoyed the largest weighting increase to 0.37 percent from zero in the MSCI Taiwan Index, while Taiwan Semiconductor Manufacturing Co (台積電) saw its weighting cut by 0.25 percentage points, the steepest decrease, to 54.29 percent.

The latest index adjustments are set to take effect after the market closes on Nov. 30.

MSCI index reviews are conducted in February, May, August and November each year. The indexes, provided in US dollar terms, help guide professional investors in adjusting their portfolios.