On the morning of August 12, Beijing time, MSCI, a well-known global index company, announced the results of the quarterly review change. In this adjustment, MSCI China Index newly included 7 Chinese stocks, excluding 2.
It is worth noting that the new energy industrial chain target has become the highlight of this adjustment. Among the 7 newly included targets, 5 companies have closely related to new energy sector .
newly included 7 Chinese stocks
In the MSCI series of indexes, the A shares include MSCI China Index, MSCI China A-share onshore index and MSCI China All-stock Index. The most noteworthy of these is the MSCI China Index. Since the index is nested into the MSCI Emerging Markets Index, the entry of the MSCI China Index means entering the MSCI Global Standard Index series and will receive a large amount of passive capital tracking.
MSCI China Index added 7 new targets, all of which are A-share targets, namely Tongrentang , China Merchants Ship , Paineng Technology, Salt Lake Shares, Tianqi Lithium, Yuntianhua , and Zangge Mining.
Source: MSCI official website
From the industry to which the stock is transferred, most of the targets of the new energy industry chain of this adjustment have been transferred. Yanhu Co., Ltd., Tianqi Lithium Industry, and Zangge Mining are all leaders in the concept of salt lake lithium extraction. Paineng Technology is one of the global energy storage brand leaders. As a phosphorus chemical giant, Yuntianhua is also regarded by the market as a high-quality supplier of lithium battery materials in the future.
This MSCI quarterly index adjustment will officially take effect after the closing on August 31. Therefore, the MSCI China Index newly included in stock may usher in overseas passive index funds in the late trading of on the same day.
In addition to the newly included stocks, MSCI China Index excluded two Chinese stocks this time, both of which are Hong Kong stock targets, namely Xuhui Yongsheng Service and Longfor Group. Longfor Group, which is listed on the Hong Kong stock market, has continued to fall in 's share price since the beginning of this year, with a drop of more than 63%. On the evening of August 7, Longguang Group issued an announcement to suspend interest payments, saying that it had officially announced a breach of contract. Since August 9, the company has been suspended for a continuous period of trading, and has not resumed trading in to date.
Foreign capital is optimistic about the Chinese economy in the long term
European asset management giant Amber recently expressed its views that the recent improvement in Chinese stock market performance is partly due to the relatively more favorable currency and fiscal environment.
Amber believes that despite the recent rebound, Chinese stocks are still more attractive compared to many global stock markets. For example, the forward price-to-earnings ratio of MSCI China Index is 11.1, which is far lower than the MSCI US Index and MSCI Global Index. Meanwhile, the forward earnings forecasts for Chinese companies appear to be high enough, with the market consistently expected revenue growth rate of 7%, net profit margin of 4.7%, and earnings per share growth of 15%.
"So, we think there is enough reason to remain relatively optimistic about the outlook for the Chinese stock market." Amber said he prefers Chinese companies that are attractive, less affected by macro-risk factors and relatively low valuations.
Edited by: Wang Yin
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