Jeweller and duty free group big MSCI winners
China Tourism Group Duty Free and Chow Tai Fook Jewellery led a rally in Chinese offshore stocks yesterday after being added to the MSCI China All Shares Index in a rebalancing exercise that pushed them and 32 other companies on to the investment radar of index-tracking investors.
The New York-based global index compiler adjusted the MSCI China All Shares Index in its semi-annual rebalancing, adding 34 stocks and removing 39.
China Tourism Group and Chow Tai Fook were the two biggest winners.
The duty free shopping provider rose 2.5 per cent to HK$201 while the jeweller jumped 5.7 per cent to HK$14.44 in Hong Kong yesterday. Together, their market value surged by US$3.05 billion.
The index adjustments, first announced on November 10, took effect after the close of trading on
November 30. At the same time, MSCI also added 266 stocks to its China All Shares Small Cap Index, and removed 69 stocks from it.
The MSCI China All Shares Index tracked 795 stocks on October 31, according to MSCI database, with a combined market value of US$2.71 trillion. Its biggest constituents were Tencent
Holdings, Alibaba Group Holding, Meituan and Kweichow Moutai.
This week’s rebalancing came at a fortunate time for investors, who rode a US$1.7 trillion stock rebound in Hong Kong and mainland exchanges last month in a rally not seen since October 1998.
Stock bulls also went on a buying spree after Federal Reserve chairman Jerome Powell tempered its policy tightening pace, fanning risk appetite.
Sentiment on Chinese onshore stocks has been improving following louder calls for Beijing to abandon its zero-Covid policy.
Foreign investors bought US$1 billion worth of stocks in the November 25 week, bringing the total in 2022 to US$7 billion, according to data compiled by Goldman Sachs. Mainland funds separately picked up US$47 billion worth of Hong Kong-listed stocks this year.
In other changes, the MSCI China A Onshore Index received 69 new joiners, while seven departed. Its subset small cap index got 186 new members, while 69 fell out of favour. The three largest additions were Zhuzhou CRRC Times Electric, Datang International Power Generation and Shanghai Fudan Microelectronics Group.
Zhuzhou CRRC, a maker of train parts, rose by 0.8 per cent, and Fudan Microelectronics added 1.4 per cent yesterday, generating an additional net equity wealth of 1.4 billion yuan (HK$1.54 billion), according to Bloomberg data. Datang Power slipped 1 per cent to 2.96 yuan in Shanghai.
The gauge tracked 751 yuan-denominated stocks with a market value of US$2.69 trillion as of October 31.