Chinese e-commerce giant Alibaba Group Holding and search engine Baidu were two of the three largest companies added to the MSCI Emerging Markets Index Thursday. The third was Emirates Telecommunications Corp. based in the United Arab Emirates.
The additions were part of the index giant’s semi-annual review of all its indexes. All changes will go into effect at the close of trading on Nov. 30. The MSCI Emerging Markets Index is the benchmark for the emerging markets, the leaders of which are Brazil, China and India. It’s also the benchmark for the largest exchange traded fund that tracks the emerging markets. The iShares MSCI Emerging Markets ETF (EEM) holds 23.5 billion in assets under management.
Altogether 14 Chinese stocks that trade on US stock exchanges as American Depositary Receipts were added to the Emerging Markets index and the MSCI China Index.
- 58.com
- Alibaba Group Holdings
- Baidu
- Ctrip .com International
- JD.com
- Netease com
- New Oriental Education & Technology Group
- Qihoo 360 Technology
- Qunar Cayman Islands
- Soufun Holdings
- Tal Education Group
- Vipshop Holdings
- Youku Tudou
- YY Inc.
With an estimated $9.5 trillion benchmarked to the MSCI’s indexes, typically when a stock gets added to an index, every mutual fund, ETF and portfolio that tracks the index must buy the new additions so their portfolios will perfectly track the index minus expenses. Typically, this results in shares seeing significant gains between the announcement of their addition and the date they actually go live as an index component.
Hong Kong Land and Melco Crown Entertainment were added to the MSCI Hong Kong Index.
“The change is pretty dramatic,” Gabriel Wallach, who invests in Chinese growth stocks as founder and portfolio manager at North Grove Capital LLC, told Bloomberg 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.”
New additions to the China Small Cap Index included:
- 21Vianet Group A
- 500.com
- 5IJOb
- Airmedia Group
- Bitauto Holdings
- Bona Film Group
- Changyou.com
- Cheeta Mobile A
- China Ocean Resources
- China Yuchai International
- CKH Holdings
- E commerce China
- EHI Car Services
- Homeinns Hotel Group
- Hutchinson China Meditech
- Idreamsky
- Ikang Healthcare Group
- JA Solar Holdings
- Jinkosolar Holdings
- Jumei International Holding
- Kongzhong Corp
- MOMO
- Netqin Mobile A
- Noah Holdings
- Phoenix New Media
- Renren
- Seaspan Corp
- Shanda Games
- Sina
- Sohu
- Tarena International
- TianJin Zhongxin Pharma
- Vimicro Internation al Co
- Wowo
- Xuenda Education Group