MSCI Deletions Trigger Rush to Sell Chinese Telecom Stocks
- S&P Dow Jones Indices, FTSE Russell take similar actions
- Investors are watching whether Alibaba, Tencent are next
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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 18 times the daily average over the past three months.