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Feb. 28, 2019, 5:35 p.m. EST

MSCI to quadruple index weight of stocks listed in China

Move likely to pour billions of dollars into China

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By Shen Hong and Michael Wursthorn


Bloomberg News
A sculpture of bulls standsoutside the Shenzhen Stock Exchange in Shenzhen, China.

SHANGHAI — Index provider MSCI Inc. said it would quadruple the contribution of mainland Chinese companies’ to its benchmarks, a move that makes shares in Shanghai /zigman2/quotes/210598127/delayed CN:SHCOMP +0.26%   and Shenzhen /zigman2/quotes/210598015/delayed CN:399106 -0.62%   all but unignorable for many international investors.

While many asset managers own stakes in Chinese companies listed in Hong Kong or New York, such as Alibaba Group Holding Ltd. /zigman2/quotes/201948298/composite BABA +0.10%   or PetroChina Co. /zigman2/quotes/205108732/composite PTR -1.21%  , global investors have far less exposure to stocks listed on the mainland.

The decision is likely to pull tens of billions of dollars into China. The world’s second-largest economy is also set to enter a world bond index in April and a rival global stock index in June.

Late Thursday, MSCI /zigman2/quotes/202905332/composite MSCI +2.62%   said it would follow through on its September proposal to increase the so-called inclusion factor of mainland companies in its widely tracked emerging-markets index to 20% from its previous cap of 5% over a three-step process starting in May. That will push the weighting of domestic Chinese stocks to 3.3% by November, when the process is set to be completed, from 0.7% now. Consulting firm Z-Ben Advisors expects the move to pull $66 billion into China’s $6.7 trillion domestic stock market.

An expanded version of this report appears on WSJ.com.

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/zigman2/quotes/210598127/delayed
CN : China: Shanghai
3,386.46
+8.90 +0.26%
Volume: 41.53B
Aug. 6, 2020 3:01p
loading...
/zigman2/quotes/210598015/delayed
CN : Shenhzen Stock Exchange
2,304.52
-14.40 -0.62%
Volume: 53.40B
Aug. 6, 2020 3:00p
loading...
/zigman2/quotes/201948298/composite
US : U.S.: NYSE
$ 265.17
+0.26 +0.10%
Volume: 8.28M
Aug. 6, 2020 3:49p
P/E Ratio
32.87
Dividend Yield
N/A
Market Cap
$708.35 billion
Rev. per Employee
$781,259
loading...
/zigman2/quotes/205108732/composite
US : U.S.: NYSE
$ 35.92
-0.44 -1.21%
Volume: 82,171
Aug. 6, 2020 3:47p
P/E Ratio
9.91
Dividend Yield
3.87%
Market Cap
$112.40 billion
Rev. per Employee
$678,384
loading...
/zigman2/quotes/202905332/composite
US : U.S.: NYSE
$ 374.12
+9.54 +2.62%
Volume: 458,743
Aug. 6, 2020 3:48p
P/E Ratio
60.86
Dividend Yield
0.84%
Market Cap
$30.49 billion
Rev. per Employee
$460,792
loading...

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