A recent quarterly review by FTSE Russell of two indexes tracking Chinese stocks may result in more than US$850 million of capital flows, with sectors from metal producers to healthcare attracting passive investments, according to Goldman Sachs.
Capital goods, metal and pharmaceutical companies would each attract between US$125 million and US$300 million in passive inflows after the quarterly rebalancing of the FTSE China 50 Index and the FTSE China A50 Index on Wednesday, Goldman analysts led by Alvin So and Timothy Moe said in a report on Thursday.
Meanwhile, consumer retailers, carmakers and internet companies were expected to bear the brunt of fund outflows, with each seeing an exodus ranging from US$100 million to US$160 million, according to the report.
The estimated fund flows took into account not only the impact of the rebalancing on FTSE’s two China stock-linked indexes but also potential flows from other members of the FTSE Global Equity Index Series, it said.
FTSE added Contemporary Amperex Technology (CATL), Jiangsu Hengrui Pharmaceuticals and aluminium maker China Hongqiao Group to its China 50 index, while removing electric-vehicle maker Li Auto, Great Wall Motor and brokerage CSC Financial. At the same time, metal producer CMOC Group and solar inverter maker Sungrow Power Supply would join the A50 gauge, replacing Bank of China and parcel delivery firm SF Holdings.
The changes will be effective after the market close on December 19.
