MSCI removes more Chinese stocks from its China indexes

US index provider, MSCI Inc. continues to remove more Chinese stocks from its China indexes, which could lead to a further drop in nation’s share of a key emerging-market benchmark.

This month, 60 stocks will be removed from the MSCI China Index, adding to the 56 deletions in May and 66 in February. As of the end of July, China accounted for 22.33 per cent of the Emerging Markets gauge.

The deletions, effective August 30, will also impact the MSCI All Country World Index. Notable exclusions include Ganfeng Lithium Group and Flat Glass Group.

MSCI’s recent changes highlight the dimming outlook for China’s economy, potentially reducing the country’s dominance in emerging market portfolios in favour of countries like India and Taiwan.

This shift could further pressure China’s already struggling stock market as index-tracking funds are compelled to offload Chinese shares.

The iShares MSCI China ETF, the largest fund of its kind with assets of at least $7.9 billion tracking the MSCI China Index, is likely to be affected.

Attribution: Bloomberg

Sub-Editing: Y.Yasser