MSCI will include China’s A shares in its emerging markets index starting in June 2018, signaling a large scale repositioning of some $1.6 trillion in funds tracking the MSCI EM index.
MSCI will include China’s A shares in its Emerging Markets Index starting in June 2018, signaling a large-scale repositioning of some $1.6 trillion in funds tracking the MSCI EM index.
“This decision has broad support from international institutional investors with whom MSCI consulted, primarily as a result of the positive impact on the accessibility of the China A market of both the Stock Connect program and the loosening by the local Chinese stock exchanges of pre-approval requirements that can restrict the creation of index-linked investment vehicles globally, ” MSCI said in a statement.
The move, which was widely anticipated, could trigger an inflow of as much as $210 billion into China’s equities over the next five years, according to Goldman Sachs.
“This is a significant and highly symbolic recognition of China’s importance to the global economy, and a big vote of confidence in the Chinese growth story from MSCI and its clients, ” said Danny Dolan, managing director of China Post Global, in emailed comments.
