(Nov 6): The number of Chinese companies in MSCI Inc’s global stock gauges has climbed for the first time in nearly two years, setting up the market for more inflows from passive investors.
More Chinese stocks were added to MSCI’s Global Standard Indexes than deleted in the quarterly shuffle for the first time since February 2024, according to data compiled by Bloomberg. The index provider added 26 Chinese companies and removed 20.
The shift comes after the MSCI China Index has risen more than 30% so far this year, beating its global gauge. Many of the newly selected stocks are in sectors championed by Beijing’s industrial policy — strategic materials, robotics, artificial intelligence (AI) and high-end manufacturing.
Additions include Ganfeng Lithium Group Co, Hua Hong Semiconductor Ltd, JL Mag Rare-Earth Co, China Gold International Resources Corp, Wolong Electric Group Co and UBtech Robotics Corp.
The announcement came as Chinese stocks fell in October for the first time in six months, as an earlier liquidity-driven rally gave way to concerns about lingering US-China tensions and a struggling economy. Foreign inflows into Chinese equities moderated to US$2.2 billion (RM9.2 billion) in October from US$4.6 billion a month earlier, according to Morgan Stanley.
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The change, which saw 69 total companies brought in and 64 taken out of from the all-country world index, reflects an improving picture for Chinese stocks. Many of the new entrants have doubled or tripled in price, year to date. Now, they’re on tap for further price support in the form of inflows from passive investors that track the benchmarks.
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