On the morning of February 10, Beijing time, MSCI, a world-renowned index company, announced the results of quarterly audit changes. Among them, the adjustment of MSCI China Index often attracts a large number of overseas passive funds, and the entry and exit list is the most eye-catching. In this adjustment, MSCI China index includes 10 new Chinese stocks and excludes 4. In the new list, the top three with the largest market value are Gree Electric Appliances Inc.Of Zhuhai(000651) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Trina Solar Co.Ltd(688599) .
On the other hand, the MSCI China A-share onshore index, an index involving A-shares, increased 4 constituent stocks and eliminated 3 underlying stocks. The newly included stocks include trillion giant China Mobile.
This adjustment will take effect after the closing on February 28, 2022.
Source: MSCI official website
Gree Electric Appliances Inc.Of Zhuhai(000651) return to the flagship index
Among the MSCI series indexes, those involving A-Shares include MSCI China Index, MSCI China all stock index and MSCI China A-share onshore index.
Specifically, the MSCI China Index added 10 targets this time, including 9 A-share targets. They are China Energy Engineering Corporation Limited(601868) , China Resources Microelectronics Limited(688396) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Cngr Advanced Material Co.Ltd(300919) , Daqin Railway Co.Ltd(601006) , Gree Electric Appliances Inc.Of Zhuhai(000651) , Lu Jinsuo ADR, Ningbo Ronbay New Energy Technology Co.Ltd(688005) , Ningbo Shanshan Co.Ltd(600884) , Trina Solar Co.Ltd(688599) .
The top three stock market values newly included in the MSCI China index are Gree Electric Appliances Inc.Of Zhuhai(000651) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Trina Solar Co.Ltd(688599) . This means that the big white horse Gree Electric Appliances Inc.Of Zhuhai(000651) , which was previously excluded by MSCI, returns to the MSCI flagship index.
Compared with previous quarterly reviews, the adjustment scale of MSCI index constituent stocks is not large. From the perspective of the industry, the new targets mainly involve energy and technology stocks.
In addition to the newly included stocks, the MSCI China Index excluded four Chinese stocks this time, none of which involved a shares. The excluded stocks include voice network ADR, China youzan (H shares), Yuhua Education (H shares) and Century Internet ADR.
In addition, the list of constituent stocks of MSCI China A-share onshore index and MSCI China all stock index has also been adjusted. MSCI China A-share onshore index increased by 4 constituent stocks, namely Bethel Automotive Safety Systems Co.Ltd(603596) , China Mobile, Cngr Advanced Material Co.Ltd(300919) , Zhejiang Orient Gene Biotech Co.Ltd(688298) ; Eliminate 3 objects. MSCI China all stock index added 5 new targets, including Gree Electric Appliances Inc.Of Zhuhai(000651) , Cngr Advanced Material Co.Ltd(300919) , Lujin exchange ADR, etc; Eliminate 5 objects.
some component stocks will welcome incremental funds
Among the indexes involving a shares, the MSCI China index is the most noteworthy. As the index is nested into the MSCI Emerging Markets Index. Therefore, when the stock enters the MSCI China Index, it means entering the MSCI flagship index series, so as to obtain a lot of passive capital tracking.
Take BlackRock, a passive investment giant, as an example. Recently, BlackRock launched its first Chinese technology ETF, Anson MSCI China multi industry technology ETF. Its constituent stocks are from technology related industries in MSCI China Index, involving communication services, optional consumption and other fields.
The MSCI quarterly index adjustment will officially take effect after the closing on February 28. Therefore, the stocks newly included in the MSCI China index may usher in overseas passive index capital card buying at the end of the day.
Given that there are relatively few passive funds tracking MSCI China all stock index and MSCI China A-share onshore index, this quarterly adjustment may not bring significant capital in and out for its constituent stocks.
China’s trend of additional allocation of foreign capital remains unchanged
On the whole, foreign investment has always maintained the trend of increasing allocation to China in recent years. Citic Securities Company Limited(600030) in the research report, it was pointed out that the net inflow of northward funds exceeded 400 billion yuan last year, a record high, and the overall net inflow is still dominated by long-term allocation funds.
Since this year, the inflation pressure in the peripheral market has been obvious, and the northward capital is still in the trend of inflow. According to the data of EPFR, a capital tracking database, in the third week of 2022, some funds flowed from the US stock market into emerging market stock markets, among which Chinese equity funds were favored by funds.
From this week to February 8, the total net purchase of northbound funds was 4.252 billion yuan. From the industry point of view, the capital intensive layout underestimates the value of the blue chip sector. Among them, banks, insurance, materials, diversified finance and energy received the most net purchases of northbound funds; The industries with the largest net sales of funds from the North include software and services, pharmaceuticals, biotechnology and Life Sciences, food, beverage and tobacco, technical hardware and equipment, and capital goods.
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