MSCI Inc. will remove China’s three major telecommunications companies from its indexes on Friday, giving global funds just one day to adjust billions of dollars of passive investments.
The index provider’s decision to cut China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. at the close of business applies to their shares in Hong Kong, which are far more actively traded than the securities due to be delisted by the New York Stock Exchange. The rush to rebalance lifted volume in all three stocks to at least seven times the daily average over the past three months.
MSCI Deletions Trigger Rush to Sell Chinese Telecom Stocks
Bloomberg 1/8/2021 Jeanny Yu and Sofia Horta e Costa
(Bloomberg) MSCI Inc. will remove China’s three major telecommunications companies from its indexes on Friday, giving global funds just one day to adjust billions of dollars of passive investments.
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The index provider’s decision to cut China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. at the close of business applies to their shares in Hong Kong, which are far more actively traded than the securities due to be delisted by the New York Stock Exchange. The rush to rebalance lifted volume in all three stocks to at least 18 times the daily average over the past three months.
MSCI Inc. will remove China’s three major telecommunications companies from its benchmark indexes, adding fresh selling pressure to stocks that have swung wildly this week on confusion over whether they should be included in a U.S. ban on investments in Chinese companies with military ties.