MSCI changes China weighting on key index

MSCI will add 21 securities to its MSCI Global Standard Indexes, including nine listed on China A-share market.

The global leading index compiler on Thursday morning announced the results of its February 2022 Quarterly Index Review for the MSCI Equity Indexes.

All changes will be implemented as of the close of business on February 28. Twenty-one securities will be added to and 11 deleted from the MSCI ACWI Index, its flagship global equity index.

Ten Chinese securities (including nine A shares) will be added and four cut. None of those to be cut are A shares.

The three largest additions to the MSCI Emerging Markets Index measured by full market capitalization will be Gree Electric Appliances A, China Three Gorges Renewables (Group) A and Trina Solar A – all listed on Chinese Mainland markets.

As for the indexes focusing on Chinese shares, there will be four additions and three deletions from the MSCI China A Onshore Index.

The major additions will be China Mobile A, CNGR Advanced Material Co A and Zhejiang Orient Gene Biotech A.

And the MSCI China A Onshore Small Cap Index will see two additions and three deletions.

For the MSCI China All Shares Index, five securities are to be newly covered while five will be cut. The three largest additions are Gree Electric Appliances A, CNGR Advanced Material Co A and Lufax Holding ADR.

There will be four additions to and three deletions from the MSCI China All Shares Small Cap Index.

In general, foreign capital has maintained the trend of recent years of increasing allocations to Chinese shares.

Goldman Sachs said the opening up of China's domestic market and the strong momentum of reforms may make the A-share market more valuable and more accessible to international investors.

CITIC Securities said in a research report reviewing the inflow of foreign funds in 2021 that the net influx of overseas capital exceeded 400 billion yuan last year, a record high, and the overall net inflow is still dominated by funding from long-term asset allocation.

According to data from Wind Information, the year-to-date net influx of overseas capital to the mainland via Stock Connect schemes, which link the Shanghai and Shenzhen bourses with Hong Kong, was 26.51 billion yuan (US$4.17 billion) at the close on Thursday,