As ChangXin Memory Technologies (CXMT), a vanguard of China's semiconductor self-reliance, has been included in a China-related index by global index provider Morgan Stanley Capital International (MSCI), possibilities of additional capital inflows are being discussed.

According to China Central Television (CCTV) and other sources, MSCI announced on June 28 that CXMT would be officially incorporated into the MSCI China All Shares Index today (August 10).

This index comprises A-shares (common stocks issued in yuan by Chinese companies on the mainland) as well as mainland Chinese company stocks traded on the Hong Kong and US stock markets, and is regarded as a key index reflecting the condition of the Chinese stock market.

Typically, inclusion in the MSCI requires going through quarterly reviews, but stocks that have undergone a major initial public offering (IPO) can be included in the index 10 trading days after listing through a "fast track" if they meet certain conditions.

CXMT was listed on the STAR Market (the science and technology innovation board of the Shanghai Stock Exchange, often called China's Nasdaq) on June 27, and on its first day of trading, it surged 465.82% from its IPO price of 8.66 yuan to close at 49.0 yuan, claiming the top spot in market capitalization on the mainland stock market.

According to the Chinese portal Baidu, the closing price on August 10 was 51.30 yuan, and its market capitalization stood at 3.43 trillion yuan (approx. 721 trillion KRW), which is still larger than the 2.68 trillion yuan (approx. 563 trillion KRW) of the Industrial and Commercial Bank of China (ICBC), which ranks second.

Based on market capitalization tracking site CompaniesMarketCap, it ranks second among the constituents of the MSCI China All Shares Index, following Tencent (557.38 billion dollars / approx. 790 trillion KRW) listed in Hong Kong.

Hong Kong media outlet South China Morning Post (SCMP) reported market projections that the index inclusion could bring in passive (index-tracking) funds, potentially solidifying CXMT's position as the top company by market capitalization in mainland China.

Ping An Securities noted, "As CXMT, the leader in China's DRAM industry, is included in the index, the demand for passive fund allocation will increase," adding, "Interest in China's semiconductor and memory industrial chains is also expected to grow."

SCMP also reported projections that asset management firm VanEck could include CXMT as early as September in its global semiconductor exchange-traded fund (ETF).

It also introduced projections that if CXMT is soon included in the STAR 50 Index, which consists of 50 leading stocks on the STAR Market, billions of yuan in passive funds could flow in.

Swiss investment bank UBS Group projected that CXMT's share of the global DRAM market will rise from about 7% last year to about 10% in 2028, and its share of the Chinese server DRAM market will increase from about 12% last year to about 20% in 2028.

(Photo: Yonhap News)