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September 20, 2017

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Inotera Memories added to MSCI Inc.'s Taiwan index

TAIPEI -- MSCI Inc., a global index provider, has added Taiwan-based dynamic random access memory (DRAM) maker Inotera Memories Inc. (華亞科技) into the Taiwan index under the MSCI Global Standard Indexes after a semi-annual index review.

Market analysts said the inclusion reflects Inotera's significant gains in its share prices recently since the memory chip maker hit a turning point at a time when the global DRAM business is benefiting from higher pricing due to a tight supply.

In the first quarter, Inotera's net profit rose 2 percent from the previous quarter to NT$11.25 billion, the highest in the company's history. Its gross margin for the three-month period rose 1 percentage point from a quarter earlier to 54 percent.

However, the company's shares fell 0.56 percent to close at NT$35.30 off an early high of NT$36.25, as investors locked in earlier gains resulting from the MSCI inclusion.

In a statement posted on its website overnight, MSCI also said it has removed six other stocks from the Taiwan index under the MSCI Global Standard Indexes.

The six stocks are connector maker Cheng Uei Precision Industry Co. (正崴精密), China Petrochemical Development Corp. (中國石化), Feng Hsin Iron and Steel Co. (豐興鋼鐵), LCY Chemical Corp. (李長榮化學), Nankang Rubber Tire Corp. (南港輪胎) and shipping firm Wan Hai Lines Ltd (萬海航運).

However, all six have been added into the Taiwan index under the MSCI Global Small Cap Indexes, the index provider said.

In addition to the six stocks, MSCI has included 26 other stocks into the Taiwan index under its Global Small Cap Indexes, while removing a further 29.

Meanwhile, Taiwan's weighting in the MSCI Emerging Markets Index fell to 11.81 percent from 11.96 percent, while the weighting in the MSCI All Country Asia ex-Japan Index dropped to 15.22 percent from 15.27 percent.

However, its weighting in the MSCI All Country World Index remained unchanged at 1.28 percent.

Analysts said the slight cuts in Taiwan's weighting in the two MSCI indexes are not expected to have an adverse impact on the local market.

The index adjustments are scheduled to take effect after the local market closes May 30.

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