Index publisher MSCI Inc. said May 14 that 234 domestically listed Chinese companies will be added to its benchmark equity gauges as of the close of May 31 following an index review.
Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and PetroChina Co. Ltd. were the three largest additions to the MSCI Emerging Markets Index based on market capitalization.
The 234 yuan-denominated stocks, or China A-shares, will represent aggregate weights of 1.26% and 0.39%, respectively, in the MSCI China Index and MSCI Emerging Markets Index at a 2.5% foreign inclusion factor during the first phase of the entry. The second phase will take place in September after the August index review.
The inclusion of the shares is expected to funnel about $17 billion in passive funds into the world's second-biggest equity market, Bloomberg News reported May 14, citing MSCI's previous estimate.
The change will also force international retirement plans, endowments and exchange-traded funds to purchase China A-shares for the first time, Bloomberg said.
