MSCI Unveils Overseas China Indices

Terry Flanagan

Products will track $68 billion Chinese securities listed outside China.

As an indication of China’s increasing influence on global securities markets, index providers are moving beyond borders in tracking Chinese stocks.

This week, MSCI launched its MSCI Overseas China Indices, which cover more than 60 Chinese securities listed in the U.S. and Singapore with a total market capitalization of $68 billion. The securities are currently included in the existing MSCI China Indices.

“The launch of the MSCI Overseas China Indices provides investors with a more complete view of the China equity market by capturing Chinese securities listed outside Greater China,” Deborah Yang, managing director and head of Asia Pacific ex-Japan for MSCI, said in a release. “The creation of the MSCI Overseas China Indices has been driven by strong interest from institutional investors, particularly QDII managers in China, as they search for the most appropriate index for benchmarking or for the creation of index-linked investment products.”

“We believe that the MSCI Overseas China Indices are the most comprehensive and rigorously constructed indices covering this important investment opportunity set,” added Chin-Ping Chia, Head of MSCI Index and Applied Research for Asia Pacific. “For example, they exclude companies formed through reverse merger or currently on the SGX Watch List. In addition, the indices employ similar size and liquidity screens to those currently applied to the MSCI China Indices to ensure consistency and investability.”

Yang and Chia were not immediately available for additional comment, according to a New York-based spokesperson for MSCI.

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