People's Daily Online, Beijing, February 19 (Huang Sheng) MSCI, an international index compilation company, announced the results of its quarterly index review for February on February 13, Beijing time. For the A-share constituents of the MSCI Emerging Markets Index, the adjustment adds 4** and excludes 48**, which will take effect after February 29**.
In this regard, a number of industry insiders said that MSCI adjusts the index constituent stocks according to the company's market capitalization, liquidity, industry representativeness and other factors. On the whole, this adjustment is mainly a technical adjustment based on the market value inclusion criteria. The excluded sample may be excluded because it falls below the market capitalisation threshold, and its outflow is limited, and the impact on A-shares is limited.
CICC's chief overseas strategist** said MSCI routinely adjusts all of its indices four times a year, including a larger semi-annual review in May and November, and a smaller quarterly review in February and August. Each adjustment is based on objective quantitative indicators, such as market capitalization and liquidity. As a regular quarterly review, the overall impact is limited, and the outflow of funds is controllable.
*Indicates that the total weight of the 48 A-share companies excluded this time in the MSCI Emerging Markets Index is only 0097%, according to the scale of passive funds in the tracking index, based on the current MSCI A-share capital volume of about 345 billion yuan, the potential passive fund outflow scale can be calculated to be about 3RMB 300 million, which is very limited compared to the trading volume of the A** market, which is about 004% or so. The weighting of the four A-share companies included in the index is about 0037%, and the potential passive inflow is designed to be about 1300 million RMB.
Wu Xinkun, chief analyst of Haitong Strategy, said that the total market value of the 48 A-shares that were transferred out this time were all in the range of 10 billion to 24 billion yuan, which was transferred out because it was lower than the relevant market value and circulating market value standards. The impact of the adjustment on the market is mainly concentrated on the capital side, mainly foreign capital. This stems from the passive following of the MSCI Global Index, which may allocate more funds to the newly included ** and passively sell the excluded**. However, according to rough estimates, since the total market capitalization of the excluded sample accounts for only about 2% of the emerging market index, and the superposition does not involve adjusting the inclusion factor of A-shares in the 20% of the emerging market index, the overall impact of the adjustment is relatively limited.
Wu Xinkun believes that the recent positive factors in the capital and policy side continue to accumulate, from the policy point of view, the first quarter is often the time window for major domestic meetings, and the positive steady growth policy will continue to exert force, and the domestic fundamentals may be gradually repaired.
Gu Shengxi, chief analyst of CITIC Index Research, believes that as of January 31, 2024, China's weight in the MSCI Emerging Markets Index is about 2487%, which is an important position in emerging markets. Since February 2024, the total net inflow of northbound funds has been 2116.9 billion yuan, the current CSI all-time index in the past ten years of PE historical quantile is about 14%, for foreign capital is a good time to allocation.