MSCI adds China-listed stocks to index in long awaited move

Chelsea West
June 21, 2017

MSCI will include 222 large capitalization Chinese stocks in its MSCI Emerging Markets Index, representing 0.73 percent of the index.

United States stock index provider MSCI has agreed to include China's mainland domestic shares in its emerging markets index for the first time.

In 2017, internationally-listed Chinese stocks have proven a better bet than their local counterparts. And they would probably be included in the EMI next year. "We believe an inclusion is both feasible and investable". So there's a big lag between where equity funds are positioned globally and how big China has become. With retail investors' pessimism over the market, they are still worrying about further yuan depreciation.

"From today, worldwide investors who don't know the A-share market, and who aren't looking at Asia from Asia, need to focus on that".

As crude oil prices declined this year, the Tadawul gauge has dropped, lagging behind an average of peers as measured by the MSCI Emerging Markets Index, which increased 17 percent through June 19.

Chinese markets finished mixed Tuesday ahead of the decision. But we have to note that in certain stocks, we can get exposure in the A shares to industries we can't get in H-shares. - Launch of a Real Estate Investment Trusts' (REITs) market to further broaden and diversify investment opportunities. "We know this as we are doing it today".

Shanghai: China stocks slipped on Tuesday amid lingering concerns over liquidity conditions, even as investors awaited a decision by U.S. index provider MSCI on whether to add mainland shares to its Emerging Markets Index.

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Making the MSCI cut does mark a very important step in China's aim to be a major player in global markets but some still question the control it also wants to exert over its own financial market. Chinese government frequently employed trader-unfriendly measures such as trading suspensions and restrictions on the sell-side to cool down the market pressures on times of global sell-off. - Investor relations training for Tadawul's 24 corporates with the most worldwide exposure and liquidity to enhance transparency and disclosure and enhance investor relations capabilities within Saudi listed companies. The Nikkei Stock Average was 0.2% lower, edging down from a 22-month closing high in the previous session.

In 2003 access was allowed for qualified foreign institutional investors (QFII) for the first time.

However, we found subtle changes in the market sentiment lately. Investors often look to pounce on any opportunity in the stock market. The review is the fourth straight year MSCI has considered adding the mainland-traded stocks. A similar Shanghai-Hong Kong stock-trading link opened up in late 2014. By and large, however, investors appear to be confident enough about the current framework. BlackRock, the world's biggest asset manager, has backed inclusion of domestic Chinese shares this year.

The shares would account for more than 10 per cent of the index under its regular classification metrics.

Tom Orlik, chief Asia economist for Bloomberg Intelligence, said in an interview with Xinhua on Tuesday that MSCI inclusion confirms and will accelerate the trajectory of China's capital market opening.

"While the short and longer term impact will have to be monitored, investors will be cognizant that China's weighting and influence continues to increase".

Some also attributed the market apathy to the largely symbolic nature of the MSCI decision. For the last three years, the index giant had decided against adding the mainland traded stocks.

Other reports by TheSundaySentinel

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