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Foreign investors tap opportunities in China's A-share market

2018-08-31 20:35  Cfbond

By Tang Guhan

The Morgan Stanley Capital International (MSCI) organization added 10 more A-shares to its MSCI Emerging Markets Index officially on Friday, as reported by the China Securities Journal.

The 236 A-shares after the inclusions accounts for 0.75 percent of the index of the MSCI, an American provider of equity, fixed income, hedge fund stock market indexes, and equity portfolio analysis tools, up from 0.39 percent at the end of May.

Every 0.25 percent increase in the Index could bring about USD 11 billion in incremental funds for the A-shares, according to estimates from the MSCI.

"The first step, a 0.39 percent of the MSCI Emerging Markets Index in May, has been conducted smoothly and foreign investors are expecting the A-shares to play a bigger part in the Index," said Xie Zhengbin, the director from the MSCI Asia research department.

Foreign institutional investors believe it is a good timing to include A-shares in their portfolios for long-term investments as A-shares are now undervalued, said the China Securities Journal.

One of the pressing concerns for investors is how much incremental funds will flow into the A-shares market.

May's inclusion process has led to an additional USD 9 billion in the A-shares market during a period of a week before and after the move, according to statistics from the MSCI.

"MSCI is seeking to expand the inclusion scale and weighs of the A-shares in the indexes in a bold move," said Henry Fernandez, the CEO of MSCI. However, he declined to reveal how many more A-shares are set to be included in the company's plan.

The FTSE Russel, MSCI's counterpart, was reported by Reuters recently as considering the inclusion of A-shares into its flagship indexes as well.

责任编辑:Yin Lei