MSCI Inc.’s decision to start tracking internet giants JD.com Inc. and NetEase Inc. via their Hong Kong shares rather than American Depositary Receipts may reinforce a gradual shift in liquidity away from the U.S. for Chinese stocks.

The move comes amid heightened tension between the U.S. and China over listing rules that is seeing some firms favor security at home over the allure of Wall Street.

Investors and analysts say there is also potential for the developments to encourage other companies to bring a greater proportion of their float to Hong Kong, eventually qualifying them for the Stock Connect program with mainland markets.

The change from MSCI takes effect Dec. 2 and follows a similar move earlier this year to track Alibaba Group Holding Ltd. via its Hong Kong shares rather than its ADRs. Of the more than 40 Chinese ADRs tracked by MSCI, there are about a dozen with shares in Hong Kong that could see a similar switch in the future.

While the change isn’t expected to have any significant impact on the share price of JD.com or NetEase in the short term, it is likely to see passive funds that follow MSCI migrate their holdings from ADRs to shares in Hong Kong, if the experience with Alibaba is any guide.

Also aiding JD and NetEase’s passive inflows is Hang Seng Indexes Co.’s announcement to add the two companies to the city’s benchmark Hang Seng Index effective Dec. 6. Asset managers including BlackRock Inc., T Rowe Price Group Inc., UBS Group AG and State Street Corp. rushed to shift holdings in Alibaba into Hong Kong stock in May, U.S. and Hong Kong exchange filings show.

Alibaba’s Hong Kong float has now risen to nearly match that of ADRs compared with 38 percent at the end of the first quarter.

On Friday, Hong Kong’s stock exchange relaxed rules for secondary listing rules from 2022, a move that Citigroup Inc. analysts say will attract more ADRs to list in the city.

Domestic Chinese investors could eventually snap up stocks like JD.com and NetEase via the southbound trading link with Hong Kong if trading volumes ramp up to make the shares eligible for the scheme, said Brendan Ahern, Chief Investment Officer at Krane Funds Advisors LLC. (SD-Agencies)