MSCI Inc. on Tuesday said it would add several onshore Chinese stocks to its closely watched and widely duplicated emerging-markets index.

The financial data company said it would add S.F. Holding Co., 360 Security Technology Inc. and China Shipbuilding Industry Corp., among other names, to the benchmark.

MSCI has been broadening exposure to stocks traded onshore in the world’s second-largest economy in its indexes after announcing it would do so last year.

Trillions of dollars follow MSCI’s indexes, including funds that mimic its benchmarks. Foreign investors previously focused primarily on Chinese stocks traded offshore, for instance in Hong Kong, but have made use of new programs granting access to onshore markets in Shanghai and Shenzhen.

China is forging ahead with its equity market reforms even as the world’s third-largest stock market heads for the worst year since 2011 and a trade war started by the United States poses economic challenges, according to MSCI Inc.

The index provider’s concerns that China may roll back market access to global investors have been allayed, said Chia Chin Ping, MSCI’s managing director for research. The government of the second-biggest economy has looked beyond market turmoil to announce steps that will reduce its role in the stock market, he said.

“When the trade war started, we were concerned how the whole market liberalization will be affected,” Chia said in London. “But instead of locking up the market, they are actually moving forward and seeking greater participation from investors from anywhere in the world.”

China’s equity benchmark has underperformed broader emerging market stocks in dollar terms for 11 of the 13 quarters since the middle of 2015, when investor confidence in the market took a jolt amid government intervention to stop a US$6.3 trillion rout. But the inclusion of mainland shares in MSCI emerging market indexes in June 2018 has revived investor interest in China.

While the Shanghai market is the third-worst performer in the world this year owing to the concern around the trade war, equity inflows have resumed in the past three months. The MSCI inclusion has also boosted the Shanghai-Hong Kong Stock Connect system, designed to allow international investors to invest in mainland shares without having to establish a local presence. (SD-Agencies)