MSCI Inc’s latest attempt to bridge the gap between China and global asset managers involves whittling down the number of shares that index tracking investors might be forced to own by more than half.
Only 169 mainland China-listed companies are to be considered for inclusion by benchmark gauges, down from 448 under a previous proposal, and all are to be large-cap shares currently accessible to foreign investors through exchange links with Hong Kong.
The weighting of A-shares, yuan-denominated stocks, would be just 0.5 percent of the MSCI Emerging Market Index, half the previous suggested level, a consultation paper published on MSCI’s Web site on Wednesday showed.
MSCI is surveying stakeholders for the fourth time on the merits of having members of China’s US$7 trillion equity market in its benchmark indexes. Previous efforts foundered on concerns over issues such as repatriation limits and excessive trading suspensions.
With Chinese officials signaling that they are in no rush to meet the last of the index compiler’s demands, MSCI’s less ambitious proposal has increased the chance of success, analysts said.
“It bodes well for the possibility of A-share inclusion,” Credit Suisse Group AG Hong-Kong based strategist Chen Li (陳李) said.
The likelihood of this happening in June has risen to “40 percent, compared with [an] earlier 20 percent,” given that it is “unlikely” China will lower capital controls for this, Chen said.
Under the latest proposal, the offshore yuan is to be used for index calculations, rather than the onshore currency, as previously suggested.
To address investor concerns over the relatively high number of A-share suspensions, stocks that have been halted for more than 50 days in the past 12 months would not be eligible, the statement said.
“This move will enhance the possibility for A-share inclusion,” Pegasus Fund Managers Ltd (東驥基金管理) managing director Paul Pong (龐寶林) said in Hong Kong. “Previously, one major concern was that it might be difficult to pull money out in a timely fashion.”
MSCI, compiler of one of the world’s most followed emerging-market indices, last year said that it would reconsider adding Chinese domestic shares in its review this year.
The rejection surprised analysts at many major banks, including Goldman Sachs Group Inc and Citigroup Inc.
Chinese shares traded in offshore markets such as Hong Kong and the US are already part of MSCI’s gauges.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS