SHANGHAI, – China’s planned rebalancing of indexes is expected to trigger an estimated $48 billion in two-way passive investment flows, according to Goldman Sachs, as major indexes undergo semi-annual adjustments later this month.
Beneficiaries from potential net inflows include Huagong Tech Co, Yuanjie Semiconductor Technology Co and Hua Hong Semiconductor Ltd, the Wall Street bank said.
* The China Securities Index Co and the Shenzhen Securities Information Co announced the semi-annual index review results for key CSI and CNI indexes after the market close on Friday.
* Constituents of large-cap index CSI 300, mid-cap index CSI 500 and small-cap index CSI 1000 will be adjusted at the close of trading on June 12, according to China Securities Index Co.
* Adjustments will also be made to indexes including the SSE 50, the SSE 180 and the STAR 50.
* The Shenzhen Securities Information Co said in a separate statement that constituents of the Shenzhen Component Index , ChiNext Index, Shenzhen 100 Index and ChiNext 50 Index will be adjusted on June 15.
* “Overall, we expect the major CSI and CNI index rebalancing to generate over $48 billion in gross two-way passive flows,” Goldman said in a note.
* Among the companies expected to benefit the most from passive inflows are GigaDevice, VeriSilicon , Piotech, and Zhejiang Century Huatong , according to Goldman.
* On the other hand, stocks facing the largest passive outflows due to index deletions are expected to include Beijing-Shanghai High Speed Railway, Hengtong Optic-Electric Co, Shaanxi Coal and Haier Smart Home Co, the bank said.
* The index adjustments will increase the representation of information technology, telecommunications and industrial companies.
* China Securities Index Co said the changes are intended to better align the benchmarks with China’s national development priorities and strategic industries.
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