MSCI to add 29 Chinese securities to its index

Twenty-nine Chinese securities, including 28 from the A-share market, will be added to the MSCI China Indexes, according to MSCI Inc on Friday.

The leading global index provider announced the results of the August 2023 Index Review for the MSCI Equity Indexes on Aug 10, including adjustments to China A Onshore Index and China All Shares Index.

Among them CNPC Capital A, Gongniu Group A and Eastroc Beverage Group A are largest additions to both the MSCI China A Onshore Index and the MSCI China All Shares Index.

Other securities to be welcomed into the MSIC China index include Accelink Tech A, Anhui Jianghuai A, Anker Innov A, and a Hong Kong-listed stock Sinotruk.

From the perspective of industries, several automobile stocks, such as Anhui Jianghuai A, Baic Bluepark A and Beiqi Foton Motr A, will be included in the adjustment.

Leading precision manufacturing companies such as Eoptolink Technology Inc Ltd, a high-speed optical transceiver manufacturer, Everdisplay Optronics (Shanghai) Co Ltd, specialized in AMOLED display production, and Farasis Energy (GanZhou) Co Ltd, a lithium-ion pouch battery manufacturer, will be added.

Two companies from traditional Chinese medicine sector, Chongqing Taiji Industry (Group) Co Ltd (Chongqing Taiji A) and Jiangsu Nhwa Pharmaceutical Co Ltd (Jiansu Nhwa A), will also be included.

This move by MSIC Inc and forthcoming policy measures in China might provide a lift to the Chinese stock market, China Security Journal reported on Friday.

The People's Bank of China is expected to bolster funding support for the private sector, a move that will help boost market confidence.

China is sending out more favorable policy signals, said Kristina Hooper, chief global market strategist at Invesco, a global investment management company.

The resilience of the Chinese economy is foreseeable, as evidenced by the strong export performance of electric vehicles, electric vehicle batteries and solar panels, said Zhao Yaoting, chief market strategist for the Asia-Pacific (excluding Japan) at Invesco.