MSCI will quadruple the weight of the index of listed stocks in China



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SHANGHAI – Index provider MSCI Inc. said it would quadruple the contribution of mainland Chinese companies to its benchmark indexes, a move that creates shares in Shanghai

SHCOMP, + 1.45%

and Shenzhen

399,106, + 1.01%

All this is almost impossible for many international investors.

While many asset managers hold stakes in Chinese companies listed in Hong Kong or New York, such as Alibaba Group Holding Ltd.

Baba -0.84%

or PetroChina Co.

PTR, -2.07%

, global investors are much less exposed to equities listed on the continent.

This decision is expected to result in tens of billions of dollars in China. The world's second-largest economy is also expected to enter a global bond index in April and a competing global stock market index in June.

Thursday, MSCI

MSCI, + 2.20%

announced that it would follow up on its September proposal to increase to 20% the so-called inclusion factor of the mainland companies of its widely followed index of emerging market markets, by compared to its previous ceiling of 5% on a three-step procedure starting in May. This will bring Chinese domestic equities weighting to 3.3% by November, by which time the process must be completed, compared to 0.7% now. Adviser Z-Ben Advisors expects this decision to fuel $ 66 billion in the Chinese national stock market, which amounts to $ 6.7 billion.

A developed version of this report appears on WSJ.com.

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