MSCI Rolls Out New Overseas China Indexes

MSCI, the world’s premier provider of international indexes, this week launched a new series of China-focused indexes that include China-based companies whose shares aren’t listed in China and aren’t yet in any MSCI China indexes, including firms such as China’s Google, Baidu.

The MSCI Overseas China Indices are designed to capture the investable universe of Chinese securities outside Greater China, covering Chinese securities listed on the NYSE Euronext – New York, Nasdaq, New York AMEX and the Singapore Exchange, MSCI said in a press release.

“We believe that the MSCI Overseas China Indices are the most comprehensive and rigorously constructed indices covering this important investment opportunity set,” Chin-Ping Chia, head of MSCI Index and Applied Research for Asia Pacific, said in the statement.

The new lineup is a departure from MSCI’s approach to China up to now, where the company’s existing indexes focused on securities listed on exchanges in Hong Kong, Shanghai and Shenzhen, and excluded those listed in New York or Singapore. Baidu tops the list of holdings of the MSCI Overseas China Index.

Increased Access To China

The new indexes cover more than 60 stocks with a market capitalization of $68 billion, MSCI said. While listed outside of China, the companies in the new indexes are headquartered in China and generate most of their revenue or have most of their assets in that country.

“The creation of the MSCI Overseas China Indices has been driven by strong interest from institutional investors, particularly [qualified domestic institutional investors] in China, as they search for the most appropriate index for benchmarking or for the creation of index-linked investment products,” Deborah Yang, managing director and head of Asia Pacific ex Japan for MSCI, said in the press release.

The new indexes, combined with the existing MSCI China indexes, create 60 new benchmarks in total, the company said in the release.

For instance, the combination of the MSCI Overseas China Index with the existing MSCI China Index and the MSCI China A Index forms the new MSCI All China Index

Large-, mid- and small-cap versions of the MSCI All China Index are also being made available, covering more than 2,100 names in a move that gives investors a comprehensive global representation of the China investable universe, the company said in the release.

The previously existing MSCI China Index serves as a benchmark to the $29.5 million iShares MSCI China ETF (NYSEArca: MCHI), launched in March.

The indexes are reviewed quarterly.

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MSCI Rolls Out New Overseas China Indexes