Global index compiler MSCI begins process to double the weighting of Chinese stocks in benchmark stock gauges
- Chinese stocks’ representation in MSCI’s indices will double in the first part of a three-step process
- Wens Foodstuff Group A, Contemporary A and Shenzhen Mindray A will be added to the MSCI China A Onshore Index
Global index compiler MSCI has taken the first step to increase the representation of Chinese shares in its benchmark gauges as part of a plan to quadruple the stocks’ weighting by November.
The weighting of mainland-traded shares in the MSCI Emerging Markets Index will double starting after the market close on May 28, with the inclusion factor, or adjusted free-float market cap, lifted to 10 per cent from 5 per cent, MSCI said in a media release.
Meanwhile, 18 companies on the ChiNext board hosting growth stocks, including Lepu Medical Technology and Wens Foodstuff Group, will be added to the gauge for the first time, it said.
MSCI, in a statement released late on Monday in New York, said that it would add 26 new names to the China A Large Cap index and that there would be no deletions, bringing the number of constituent companies in the index to 264. The MSCI China A Mid-Cap index would have 29 additions and five deletions, bringing the index to 173 constituents.
Additionally, 109 companies will be added and three deleted from the MSCI China A Onshore Index. MSCI said the three largest additions to this index would be the Wens Foodstuff, Contemporary Amperex Technology and Shenzhen Mindray Bio-medical Electronics.