Global index provider MSCI said it would remove Han's Laser Technology from its China indexes and slash the weighting of Midea Group Co, citing issues triggered by foreign ownership ceilings. MSCI's statement on Thursday came a day after Chinese regulators blocked foreign purchases of shares in Han's Laser as offshore ownership of the firm neared the 30 percent limit under Chinese rules.
The ownership limit could become a bigger headache for overseas investors buying Chinese stocks, especially small- and mid-caps, as Beijing steps up efforts to attract foreign capital to counter the impact of the Sino-US trade war. However, China is not currently considering relaxing the foreign ownership restriction, Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, was reported by the state-run Securities Times as saying on Thursday.
MSCI said "in light of potential investability issue for investors", Han's Laser will be deleted from the MSCI All Shares Indexes, effective March 11. Han's Laser's removal is the first since China joined MSCI's benchmark emerging markets index in 2018. Inclusion in an index can boost interest in, and buying of, a stock by index-tracking investors.
Comments
Comments are closed.