MSCI adds China Mobile, 3 other companies, to China A Onshore Index
Published: Feb 10, 2022 11:08 AM Updated: Feb 10, 2022 04:52 PM
Consumers experience 5G mobile phones at a business hall of China Mobile Beijing Branch in Beijing, capital of China, Oct. 31, 2019. (Xinhua/Shen Bohan)

Consumers experience 5G mobile phones at a business hall of China Mobile Beijing Branch in Beijing, capital of China, Oct. 31, 2019. (Xinhua/Shen Bohan)

MSCI announced the addition of China Mobile and other three companies to the equity index compiler's China A Onshore Index, likely to attract more overseas capital to the Chinese stock market. 

In a quarterly review, MSCI added Bethel Auto Safety, China Mobile, CNGR Advanced Matrl Co and Zhejiang Orient Gene to the China A Onshore index, according to a statement released on Wednesday. 

The three deletions from the MSCI China A Onshore Index are Jiangsu Shagang Co, Sunshine City Group and Xian Intl Medical Inv. 

The adjustment of MSCI China A Onshore index is expected to attract a large number of overseas funds, betting on Chinese assets, analysts said. 

MSCI's inclusion of China Mobile acts as a benchmark, showing China's technology industry has become an important investment sector to attract foreign institutional investors, Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Thursday.

He stressed the Chinese telecom operator is an important technology service provider in the Internet era, and has broad development prospects in 5G applications.

China Mobile's shares dropped 2.12 percent on Thursday after hitting historic high on Wednesday at the A-share market, with its total market value exceeding 1.44 trillion yuan ($230 billion), making it the fourth largest stock on China's A-share market, according to Wind data. 

"It is expected the MSCI will include more Chinese firms like China Mobile into its indexes," Dong said.

In addition to the changes for the MSCI China A Onshore Index, the three largest additions to the MSCI Emerging Markets Index measured by full company's market capitalization will be Gree Electric Appliances, China Three Gorges Renewables and Trina Solar.

China Three Gorges Renewables and Trina Solar are playing a significant role in China' s green push to realize carbon neutrality goals.

All changes will be implemented as of the close of February 28, 2022. 

Bridgewater Associates, the world's largest hedge fund, said at the end of January that it had more than 34 billion yuan invested in Chinese assets, and it is ramping up its allocation of yuan-denominated assets.

Song Yu, chief China economist at BlackRock also said that BlackRock is bullish on Chinese assets, including equities and government bonds, suggesting international investors increase their holiding of Chinese assets.

Global Times