MSCI will add Alibaba Group, Baidu.com and a dozen other Chinese companies listed overseas to its emerging market index from Dec. 1, a move reflective of the changing economic landscape that is likely to draw investments of US$70 billion.

    Alibaba, the world’s biggest e-commerce firm, is the largest of the 14 U.S.-listed Chinese stocks to be added to MSCI indices. Along with Baidu, it will increase the presence of technology firms in the investment benchmarks.

    The changes were part of quarterly adjustments MSCI makes to its indices, which it says are tracked by US$9.5 trillion in assets. Until now, MSCI did not include U.S.-listed companies — like Alibaba — in its specific country indices.

    “This inclusion will be more reflective of the Chinese opportunity set with big IT and consumer names being added. That shows the shift in the center of gravity from old China to new China,” said Charlie Wilson, portfolio manager at Thornburg Investment Management in the United States.

    Investors say information technology services companies are a stronger indicator of China’s domestic consumption, an area of the economy set to grow as the country shifts away somewhat from manufacturing.

    Analysts estimate the MSCI changes will trigger up to US$70 billion to flow into these stocks over the next six months.

    (SD-Agencies)