Index compiler MSCI tilts towards Chinese tech stocks in latest revamp
A net 21 stocks were added to the MSCI China Index, including SenseTime, Pony.ai and Hesai Technology
Global index provider MSCI revised its China gauge on Wednesday, swapping property and conglomerates for semiconductor and artificial intelligence stocks in a sign of technology’s rising role in the economy.
Against a macro backdrop of a relatively weaker US dollar and investors seeking greater diversification, Asia’s emerging equity markets, particularly China, have clearly attracted increased attention from offshore institutional investors, according to Shujin Chen, chief economist at CSOP Asset Management.
While passive funds tracking the index have been flowing in since late last year, Chen said “over the past one to two months, we’ve seen active funds from other parts of Asia as well as Europe show growing interest in China, with some capital starting to flow in”.
“Further inclusion of Chinese tech stocks will likely accelerate that trend,” she added.
Chinese tech stocks have gained significantly since early last year following a breakthrough by AI start-up DeepSeek. The momentum has been further reinforced as China stepped up efforts to compete with the US in an AI arms race.