24 October 2016
MSCI's China-related indexes are widely used as a reference by fund managers. Photo: HKEJ
MSCI's China-related indexes are widely used as a reference by fund managers. Photo: HKEJ

MSCI to add 9 HK-listed stocks to its China index

Nine Hong Kong-listed companies are being added as constituents of the MSCI China index, the Hong Kong Economic Journal reported Thursday.

They are China Conch Venture Holdings Ltd. (00586.HK), China Power International Development Ltd. (02380.HK), China Southern Airlines Co. Ltd. (01055.HK), Dalian Wanda Commercial Properties Co. Ltd. (03699.HK), GF Securities Co. Ltd. (01776.HK), Goldin Properties Holdings Ltd. (00283.HK), Huaneng Renewables Corp. Ltd. (00958.HK), Luye Pharma Group Ltd. (02186.HK) and Sunac China Holdings Ltd. (01918.HK).

Brokerages Bright Smart Securities & Commodities Group Ltd. (01428.HK), Cash Financial Services Group Ltd. (00510.HK), Shenyin Wanguo (HK) Ltd. (00218.HK) and Simsen International Corporation Ltd. (00993.HK) are among 19 small-caps to be included in the constituents of the MSCI Hong Kong index, thanks to the recent sharp rally in the stock market.

The changes, which come after MSCI Inc.’s quarterly review of its indices, will be effective after the close of the stock market on May 29.

MSCI Inc. will announce the result of its annual review on June 9, when it is due to reveal its decision whether to include A shares in the influential MSCI Emerging Markets Index.

The combined market capitalization of the two A-share markets, Shanghai and Shenzhen, had risen to 57.34 trillion yuan (US$9.25 trillion) on May 12, with tradable stocks valued at 47.05 trillion yuan.

However, market players are of mixed views regarding the potential inclusion. 

Fidelity, Schroders, Societe Generale Private Bank and Mark Mobius, who heads the emerging markets team at Franklin Templeton, have all voiced objections amid concerns about market accessibility.

But Mobius changed his stance recently after the introduction of Shanghai-Hong Kong Stock Connect — soon to be followed by a similar link between the Hong Kong and Shenzhen exchanges — has provided a channel for international investors to trade A shares.

Meanwhile, one of the major global equity index providers, S&P Dow Jones Indices, said the arrival of Stock Connect means Chinese stocks listed on the mainland will soon be included in its indexes.

“I don’t think it’ll be terribly long” until so-called A-shares are included, The Wall Street Journal quoted David Blitzer, chairman of the index committee at S&P Dow Jones Indices, as saying.

Stock Connect “is a major change. They’re available. They should be in indexes and they will be in indexes.”

Referring to index providers, he said, “We all watch each other.”


Translation by Vey Wong

[Chinese version中文版]

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