REASSURING WORDS: One SFB official said the impact of MSCI’s moves would be limited, since foreign institutional investors own NT$1.37 trillion in local shares

Taipei Times
Date: Feb 19, 2018
By: Staff writer, with CNA

A move by MSCI Inc to cut Taiwan’s weighting in two of its major indices is expected to prompt foreign institutional investors to remit about NT$1.1 billion (US$37.49 million) out of the nation, an estimate by the Financial Supervisory Commission (FSC) showed.

A fund drain following MSCI’s latest weighting cut was expected to hit about US$38 million, Securities and Futures Bureau (SFB) Chief Secretary Chien Hung-ming (簡宏明) said before the start of the Lunar New Year holiday last week.

However, the fund outflow was unlikely to have an adverse impact on the local equity market, as the money is dwarfed by NT$1.37 trillion in market capitalization owned by foreign institutional investors, Chien said.

MSCI announced on Tuesday that after a quarterly index review it had decided to cut Taiwan’s weighting in the MSCI Emerging Markets Index by 0.01 percentage point to 11.47 percent, and its weighting in the MSCI All-Country Asia ex-Japan Index by 0.01 percentage point to 13.30 percent.    [FULL  STORY]