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South Korea and Taiwan drive biggest shift in MSCI Emerging Markets weight
South Korea’s weight in the MSCI Emerging Markets Index is now nearly 24.0 percent, compared with about 20.0 percent for China, while Taiwan sits at 27.0 percent.
According to SCMP Economy, the MSCI Emerging Markets Index has seen a major change in regional influence over the past year as South Korea and Taiwan have overtaken China and India. Just over a year ago, mainland China and India together made up 50.0 percent of the index, but today South Korea and Taiwan account for more than half of the benchmark. The article says South Korea’s weight is now nearly 24.0 percent, about four percentage points higher than China’s, while Taiwan’s weight stands at 27.0 percent, double India’s 11.0 percent. It attributes the shift to an AI-fueled surge in semiconductor related earnings that has lifted stock markets across the two manufacturing hubs. SCMP Economy notes Taiwan’s statistics agency expects economic growth of nearly 10.0 percent this year, driven by rapid export gains tied to the AI boom. In South Korea, semiconductor exports reportedly jumped 180.0 percent on an annualised basis in the first three weeks of July. The outlet also points to strong year to date performance, saying South Korean and Taiwanese stocks are up 61.0 percent and 53.0 percent respectively this year. Carmignac, quoted in the piece, argues that in emerging markets AI is already embedded in the real economy through productivity gains, cost reductions, and margin improvement.