MSCI has removed dozens of China stocks from its global indices while continuing to add Indian securities following a rebalancing of the index.
The changes – which come into effect August 30 – will see 60 Chinese securities removed from MSCI’s global indices, alongside seven Indian securities added.
The move comes after MSCI said it was adding five Indian stocks and removing 66 Chinese companies in the MSCI Emerging Markets index at the end of February.
MSCI also removed a further 56 Chinese stocks in May.
Japan, Malaysia and Korea will also see stock additions to MSCI’s global indices.
In addition, the MSCI China index will have 69 Chinese securities removed from the index, with two additions including hydro power company Huaneng Lancang and electric product manufacturer Victory Giant.
After the February rebalance of the MSCI Emerging Markets index the weight gap fell to its lowest point, with India’s weighting expected to grow from 17.9% to 18.5%, and China’s falling to 25.4%.
Investor sentiment surrounding India and China continues to diverge, with the former showing rapid economic growth, political stability and favourable geopolitical positioning, particularly with the US.
Meanwhile, China has been hindered by issues in its property sector, deflation and regulatory pressures on tech companies.
Elsewhere, DWS switched the index of its $56m emerging markets ETF to exclude China in a bid to meet investor demand for more “regionally differentiated investments”.
