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MSCI Inc. on Monday said that it was eliminating firms like Goldin Properties Holdings Ltd and Imperial Pacific International from its equity indexes. The change will be effective from February quarterly analysis.

MSCI said it will remove securities from the MSCI Global Investable Market Indexes subsequent to the feedback from the investment community. The companies have been receiving series of notices from the Hong Kong Securities and Futures Commission regarding high shareholder concentration. This move by MSCI will also impact firms like Wanda Hotel Development, Huajun Holdings, Jiangnan Group and Honbridge.

These companies will not be eligible for enclosure in MSCI Global Investable Market Indexes until adequate public disclosure on their stockholdings is produced before the final week of February. MSCI noted that it will review all voluntary disclosure of stockholder structures of such companies.

In the notice, MSCI also said it will review the free float shares of the firms previously listed in SFC high shareholding concentration notices as per the methodologies stipulated in the MSCI Corporate Events and MSCI GIMI. MSCI said that any components of the MSCI GIMI for which the Hong Kong Securities and Futures Commission issue high shareholding concentration notice after February 2016 Quarterly Index Review will be eliminated.

According to Bloomberg, Goldin Properties' shares dropped as much as 9.6% following the announcement of MSCI to remove the company from its indexes. The company's shares are down 53% in the present year, compared with a 15% fall in the Hang Seng Property Index. Pan Sutong, who controls Goldin Properties, has lost 70% of his total wealth from the year starting, which currently stands at $2.9 billion, Bloomberg Billionaires Index said.

The exclusion from MSCI indices will not affect Goldin's operation and business and that the company will continue to enjoy the robust financial position, Reuters said quoting a spokeswoman for Goldin. According to a Thomson Reuters analysis of data on the Hong Kong-listed firms, nearly 35 companies had experienced a gigantic rise in their share market value, in spite of having revenues less than 100 million US dollar.

Reuters said that the exclusion could witness billions of dollars being removed from these firms' shares since investors try to rebalance their portfolios matching with the fresh benchmark. The new rules by MSCI come amid the mounting investor concerns on the market influence of Hong Kong shares, after a series of rare price movements in the previous year.

According to MSCI, securities removed due to the inclusion on the SFC high shareholding concentration notice will be taken for index re-inclusion only twelve month after adequate public disclosure on their shareholding is submitted.