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Global index giant MSCI Inc. will increase the index weighting of more than 200 large-cap China A-shares by raising the inclusion factor to 10% from 5% this month, with details to be announced May 14 Beijing time and changes effective as of market close May 28, according to press releases issued Monday and in February.
An inclusion factor of 10% means that 10% of total market capitalization of the large-cap shares will be added to the indexes. The rise in the inclusion factor will most likely result in around $20 billion of inflows into the Chinese mainland stock markets, analysts said.
MSCI will also add large-cap shares on China’s tech-focused ChiNext board with a 10% inclusion factor this month.
According to its plan, MSCI will further increase the weighting of large-cap China A-shares by raising the inclusion factor to 15% in August and to 20% in November. Additionally, the company will add mid-cap China A-shares, including eligible ChiNext shares, with a 20% inclusion factor in November.
Correction: An earlier version of this story misstated the amount of index weighting change.