MSCI Inc Indexes Mulls Eligibility Changes To Accommodate Alibaba
MSCI Inc (NYSE: MSCI) is mulling a rule change that would make soon-to-be launched shares of Alibaba Group Holdings Inc. and a host of others eligible for first-time inclusion on the company's widely used international stock indexes.
Inclusion in MCI indexes make companies the automatic beneficiaries of millions of dollars from investors in passive index funds.
New York-based MSCI offers more than two dozen indexes made up of companies that aren't traded on U.S. exchanges.
MSCI proposed changing its rules to enable inclusion of companies not listed in their countries of classification. While affecting Alibaba, the proposal would also cover a host of other companies.
"A number of companies primarily classified in China, Hong Kong and Russia area currently excluded," MSCI said recently.
Although based in China, Alibaba plans to list on the New York Stock Exchange. Examples it noted at present include Baidu, listed in New York but based in China, Vimpelcom, based in Russia but listed in the U.S., and Jardine Matheson, based in Hong Kong and listed in Singapore.
Akin to the S&P 500 and other well-known domestic indexes, MSCI's versions serve as a proxy for the performance of international markets and as the basis for relevant index funds and exchange-traded funds.
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