MSCI announced the latest quarterly index adjustment results show that -

  Chinese assets are increasingly attractive

  Our reporter Li Hualin

  Recently, the world-renowned index company MSCI (referred to as MSCI) announced the latest quarterly index adjustment results in 2022, arousing market attention.

  In the MSCI series of indices, A-shares include the MSCI China Index, the MSCI China A-Share Onshore Index and the MSCI China All-Share Index.

Specifically, 10 new targets are added to the MSCI China Index this time, including 9 A-share targets, namely China Energy Construction, China Resources Micro, Three Gorges Energy, Zhongwei, Daqin Railway, Gree Electric, Lufax (ADR) ), Rongbai Technology, Shanshan Co., Ltd., Trina Solar.

  In the MSCI China A-Share Onshore Index, 4 constituent stocks have been added this time, namely China Mobile, Zhongwei, Orient Bio and Bethel.

This adjustment will take effect after the close of business on February 28, 2022.

  Compared with the past, the adjustment of the constituent stocks of the MSCI index this time is not large, and the new targets mainly come from new energy, high-tech manufacturing and technology stocks.

  "This is in line with the direction of China's economic development." Yang Delong, chief economist of Qianhai Open Source Fund, said that my country is currently turning to a stage of high-quality development, and economic growth has shifted from factor-driven to innovation-driven, with the help of 5G, cloud computing, big data, artificial intelligence, etc. Strategic emerging industries such as technology, new energy, intelligent manufacturing, and new materials have developed rapidly and are becoming a new trend in the development and progress of the national economy.

In this context, foreign investors have increased their allocation of related stocks, not only optimistic about the development of related industries, but also expected to obtain good returns from them.

  As a leading index compilation company, MSCI provides benchmark index references for global investors.

Among the indices involving A-shares, the MSCI China Index is the most closely watched.

Because it is nested into the MSCI Emerging Markets Index, and the entry of the stock into the MSCI China Index means that it has entered the MSCI flagship index series, it is generally expected to usher in a large amount of overseas passive funds, which will help listed companies to broaden the source of funds and improve liquidity.

  In recent years, foreign investors are more optimistic about Chinese assets.

Since MSCI included A-shares in the global flagship index in 2018, the weight of the Chinese market in the MSCI Emerging Markets Index has continued to increase. 38%.

  The pace of foreign capital entering the Chinese market is also accelerating. Following the net inflow of foreign capital into the A-share market of 384.6 billion yuan in 2021, hitting a new high in the past five years, since the beginning of this year, the enthusiasm of northbound funds to “buy, buy, buy” has not diminished, according to iFinD data from Flush Flush It shows that as of February 15, Beishang Capital has accelerated its purchase of A shares, with a cumulative net purchase amount of 27.948 billion yuan.

  At the same time, the scale of Chinese bonds held by foreign investors also hit a record high.

Data show that by the end of December 2021, the total amount of Chinese bonds under custody by foreign investors exceeded 4 trillion yuan.

  Looking forward to 2022, industry insiders believe that the current overseas epidemics are repeated, and the uncertainty of the economic situation is increasing. However, China's epidemic prevention and control are properly controlled, and the economy is repaired first. The good economic situation forms an effective support for the RMB exchange rate. .

Under the multiple attractiveness, Chinese stocks and bonds will remain important targets for international investors' asset allocation, and the long-term inflow of foreign capital into the A-share market will remain unchanged.

  Sun Jin, a partner of PricewaterhouseCoopers China's Integrated Business Services Department, said earlier that China's opening-up and pace of reform will be even greater this year. Improve the interconnection of A-shares to create a more attractive trading environment.

BlackRock emphasized in its "2022 Global Investment Outlook Report" that it is optimistic about Chinese assets and believes that global investors' allocation of Chinese assets is low, which is inconsistent with the growing influence of the Chinese economy in the world.

BlackRock said it would maintain a long-term overweight to Chinese assets relative to its lower global allocation.

  "Since this year, macro-control policies to stabilize economic operation have been introduced one after another. my country's economy is expected to continue its steady recovery, and its attractiveness to foreign investment will continue to increase." Yang Delong said.

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