BEIJING, Nov 13 — MSCI Inc said it will add at least 14 US- traded Chinese stocks to its indexes, giving a boost to some of the country’s biggest technology companies as President Xi Jinping moves to increase their role in the nation’s economic growth.

The American depositary receipts of companies from online retailer Alibaba Group Holding Ltd. to search engine Baidu Inc. will be listed in gauges including the MSCI China Index and MSCI Emerging Markets Index, the New York-based company said in an e- mailed statement.

Foreign companies from other countries including Israel and India also are being included in benchmark gauges, according to the statement.

With an estimated US$9.5 trillion (RM41.648 trillion) of assets benchmarked to MSCI’s indexes, stocks typically rise when they are added to them as investors adjust their portfolios to reflect the changes. For Chinese equities, the move will affect investors with at least US$400 billion of holdings and give the country a higher concentration of software companies than any other MSCI gauge worldwide, Goldman Sachs Group Inc. estimated last month.

Advertisement

“The change is pretty dramatic,” Gabriel Wallach, who invests in Chinese growth stocks as founder and portfolio manager at North Grove Capital LLC, said by phone before the announcement.

“The investor base might broaden out a little bit. It’ll be refreshing to see a more EM-institutional, or just an institutional investor base take stakes in these companies.”

Technology companies have driven a 29 per cent gain in a Bloomberg gauge of US-traded Chinese stocks from this year’s low in September. 

Advertisement

President Xi Jinping’s government is trying to increase their role in the nation’s economic growth while reducing the dependence on state-run industrial and financial firms. — Bloomberg