Global index provider MSCI Inc. has released a list of more than 200 Chinese stocks that it will include in its key indexes from next month, capping a year-long process that is likely to attract billions of dollars into China’s markets.
Last year, MSCI decided to include China-listed stocks in its global benchmarks after three years of rejections. Of the more than 3,000 companies listed in China, just 234 will be included in MSCI’s indexes on June 1, largely in line with market expectations. The initial batch of companies will have a 0.4% weighting in MSCI’s Emerging Markets Index and a 1.3% weighting in the MSCI China Index. Currently, the MSCI China Index comprises overseas-listed Chinese companies.
The weighting for China-listed stocks on both indexes is set to double in September, MSCI said Tuesday. While the inclusion of the stocks will likely have limited initial impact on Chinese equities, it comes as a much-needed boost to domestic markets, which have been among the worst performers world-wide this year. Concerns about the U.S.-China trade dispute have sent stock benchmarks in Shanghai and Shenzhen about 4% lower so far this year.
Louisa Fok, China equity strategist at Bank of Singapore, said about $18 billion will likely enter China’s stock markets after MSCI’s move, a fraction of the $70 billion average daily turnover of China’s two major markets.
An expanded version of this report can be found at WSJ.com [1]
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- ^ An expanded version of this report can be found at WSJ.com (www.wsj.com)
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