UpdateChinese stocks climb after being given the nod to join MSCI’s global benchmark indexes
New York-based index compiler will include 222 big-cap Chinese companies into its MSCI Emerging Markets Index and MSCI ACWI Index starting June next year
Mainland shares accelerated advances in the afternoon session on Wednesday after MSCI said it will add Chinese stocks to its global benchmarks for the first time – a move that should help the capital market of the world’s second-largest economy edge towards becoming more globally integrated.
“MSCI’s China inclusion is a necessary step in response to the needs of global investors. It also manifests global investors’ optimism in our country’s steady economic growth as well as their confidence in the stability of our financial market,” said Zhang Xiaojun, a spokesman for the China Securities Regulatory Commission.
MSCI said it plans to add 222 large-cap domestically traded, yuan-denominated stocks, or so called A-share, which will represent a weighting of 0.73 per cent in the MSCI Emerging Markets Index. That would be more than previous expectations for inclusion of 169 stocks with a weighting of 0.5 per cent.
Companies that will be added to MSCI’s benchmarks advanced in mainland trading, fuelling a rally in China’s indexes. The CSI 300 Index surged 1.2 per cent, or 41.47 points, to close at 3,587.96. The Shanghai Composite Index gained 0.5 per cent, or 16.20 points, to 3,156.21. Hong Kong shares fell for a second day.
China Ping An Insurance rose 2.8 per cent to 49.43 yuan and SAIC Motor climbed 3.2 per cent to 29.97 yuan. Home appliance maker Midea Group surged 4.7 per cent to 42.79 yuan in Shenzhen.