MSCI explains next steps for China A-share inclusion
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MSCI explains next steps for China A-share inclusion

A-shares included at low weight; handful of large-caps with tiny weighting.

MSCI’s decision in June to include Chinese domestic A-shares in its biggest international and emerging market indices, albeit in modest scale, was a symbolic landmark. But attention has quickly turned to the next step: increasing the weighting of Chinese shares to represent the true size of that market.


Chin Ping Chia,

The inclusion of A-shares, which will take place in two instalments in May and August 2018, will be in a very limited form – just 222 large-cap stocks with a 5% weighting relative to their actual size. 

Consequently they will represent just 0.73% of the MSCI EM Index, compared with the 27% of the index already accounted for by China-linked stocks listed in Hong Kong and New York. 

Full inclusion of A-shares at their actual market weight would account for about 20% of the emerging market index.

Euromoney asked the MSCI research team of Sebastian Lieblich and Chin Ping Chia about the next steps: towards greater weighting and towards the inclusion of mid-cap stocks rather than just large-caps.

“Looking at mid-caps and possibly going beyond 5% – these are not mutually exclusive. Potentially both could happen,” they say. “The things we would be looking for would be continuing to monitor the robustness of Connect, checking with investors to see how that is going.” 

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