On the morning of November 7th Beijing time, the globally renowned index company MSCI announced its semi annual audit change results. In this adjustment, the MSCI China Index added 4 Chinese stocks and removed 20 stocks. This adjustment will officially take effect after the close of trading on November 25, 2024.
Specifically, the four new targets added to the MSCI China Index this time are Capital Securities, Huaqin Technology, Loongson Zhongke, and Tianfeng Securities.
Capital Securities: As one of the major securities companies in China, the addition of Capital Securities may attract more investors to pay attention to China's financial industry.
Huaqin Technology: The company's influence in the fields of intelligent hardware and electronic technology is increasingly expanding, and its inclusion in the MSCI China Index means that the market has some confidence in its future prospects.
Loongson Zhongke: Loongson is a domestic chip manufacturer in China, and its inclusion in the MSCI China Index may inject new impetus into China's technological innovation, especially in the semiconductor industry.
Tianfeng Securities: As another well-known securities company, the addition of Tianfeng Securities enhances the representativeness of MSCI China Index in the financial sector.
The impact of stock inclusion
The inclusion of these stocks means that they will enter the MSCI Global Standard Index series, which may attract a large amount of passive funds for tracking. It is worth noting that as the MSCI China Index is nested within the MSCI Emerging Markets Index, these newly included stocks will indirectly attract the attention of international investors.
At the same time, in this adjustment, 20 stocks were excluded from the MSCI China Index. Among them, 17 are A-shares.
In addition to the MSCI China Index, the composition list of the MSCI China A-share onshore index has also been adjusted. In this adjustment, the index has added 8 new constituent stocks, including Supply and Marketing Daji, Huahong Group, Zhengbang Technology, etc. Meanwhile, Pailin Biology was excluded from the index. However, due to the relatively small amount of overseas funds tracking the MSCI China A-share index, this adjustment may not bring significant capital inflows and outflows.
It is worth noting that foreign investors have been optimistic about investment opportunities in the A-share market recently. On November 6th, Lianbo Fund stated that the A-share market is still full of investment opportunities in the medium and long term, and is highly correlated with the macroeconomic and corporate profit prospects in China. Swiss asset management company Baida has also upgraded the ratings of Chinese and American stocks from "neutral" to "overweight", citing strong economic prospects. Goldman Sachs has once again been bullish on Chinese assets, maintaining its "overbooked" rating on Chinese A-shares and H-shares, and expects the potential return rate of these two markets to be around 20% in the next 12 months.
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