One Month After A-Shares Inclusion Into MSCI, 70% of 222 Concept Stocks Rise, 20 Hit New High
Xu Wei
/SOURCE : Yicai
One Month After A-Shares Inclusion Into MSCI, 70% of 222 Concept Stocks Rise, 20 Hit New High

(Yicai Global) July 21 -- In the small hours of June 21, MSCI announced its decision to incorporate China's A-shares into the MSCI Emerging Markets Index.

Yesterday marks the end of the first month after the incorporation.

Since June 21, 159 ones among the 222 incorporated concept stocks saw rises, which account for 71.62 percent of the total, data from wind.com shows. Also, 20 stocks hit a new high, with six further creating a new record today. In line with the report by Securities Times, from the perspective of share price, 90 percent of these 20 stocks hitting a new high rose constantly over the last month, and only two stocks of pharmaceutical companies, namely Bicon Pharmaceutical Holdings Co. [SHE:002411] and Dong-E-E-Jiao Co [SHE:000423] dropped.

Among these 20 stocks hitting a new high, those coming out on top were mainly food and beverage producers, banks, and listed companies dealing in electronics. That the food and beverage industry where consumer product stocks are so crucial has become one of the focuses in the market after the inclusion of these stocks into MSCI indexes is a factor that warrants attention. 

Further comparison indicates the 20 above stocks above are all constituents of the Hushen 300 Index, with Shanghai and Shenzhen Stock exchanges sharing them in equal amounts. Also, it should be noted that the above 20 stocks also include six constituent stocks of the Shanghai 50 Index, namely Anxin Trust & Investment Co. [SHA:600816], China Merchants Bank Co. (CMB) [SHA:600036], Shanghai Pudong Development Bank Co. (SPDB) [SHA:600000], Shanghai Automotive Industry Corp. [SHA:600104], Yili Industrial Group Co. [SHA:600887], and Kweichow Moutai Co. [SHA:60059].

Since June 21, SSE 50 Index has gotten the better of the Shanghai Composite Index that rose by 3.34 percent by its greater rise of 7.78 percent. During this period, the 29.75 percent rise of Anxin Trust & Investment, the 19.54 percent rise of CMB, the 10.82 percent rise of SPDB, the 9.02 percent rise of Shanghai Automotive Industry Corporation, and the 4.59 percent rise of Yili Industrial Group were all superior to the 3.34 percent of Shanghai Composite Index, except for Kweichow Moutai.

Among 222 MSCI concept stocks, Shanghai Fosun Pharmaceutical Group [SHA:600196], China Film Co. [SHA:600977], Alpha Group [SHE:002292], Beijing Capital Co. [SHA:600008], Beijing Building Materials Group Corp. (BBMG) [SHA:601992] and Hundsun Technologies Inc. [SHA:600570] has dropped over 10 percent since June 21.

 The share price of Fosun Pharma slumped and was affected greatly from June 22 to July 6 by sudden market rumors.

China Film and Alpha Group, which are both in the media industry, were affected by the depressed media market in this year. The media market index dropped 14.6 percent this year, ranking the fourth from bottom in 28 industries of SWS index, statistical data wind.com shows.

Beijing Capital and BBMG, which both inhere among concept stocks in the Xiong'an New Area, hovered at a low price after a surge in April.

Hundsun Technologies announced its 2016 internal control audit report on July 5 and disclosed it has received a ruling 2016 ruling from the China Securities Regulatory Commission (CSRC). CSRC decided to "confiscate CNY110 million (USD16.5 million) illegal gains of Hundsun Technologies, and impose a fine of CNY330 million." It has paid CNY20.5 million, with CNY419 million still unpaid. At present, the market is still affected by the punishment imposed on Hundsun Technologies, and stock price is low.

After the inclusion of A-shares into MSCI, the stock price of many of 222 MSCI concept stocks rose, while a few dropped, thus indicating a great change in market investors' mainstream preferences.

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Keywords: MSCI , A-Shares