By Xie Fang
Two days before the inclusion of China’s A-share market into the Emerging Market Index of the Morgan Stanley Capital International (MSCI) which is scheduled to happen on June 1, 2018, Henry Fernandez, the MSCI’s chairman and CEO, shared his views on the significance of this event, the Shanghai Securities Journal reported on Wednesday.
From his perspective, the gradual integration of China’s real economy with the global economy has been the biggest economic event over the past 30 years. And the integration of China’s capital market with the global financial market would be the biggest economic event in the next 10 years. He believed that with the inclusion of China’s A-share market into the MSCI Emerging Market Index, more international capital would flow into the Chinese market.
According to the timetable set by the MSCI, the inclusion process will start on June 1 and be completed on September 3. Fernandez disclosed that after the completion of the whole process, the MSCI would begin to learn about and assess the experience of international investors regarding their investments in the A-share market and keep in touch with Chinese financial regulators to learn more about the further opening-ups of China’s securities market.
According to the latest adjustments by the MSCI to its Emerging Market Index on May 15, the stocks of 234 A-share listed companies, all of which are large-cap stocks, will be included in the index.
When answering the question about whether there is a schedule for the inclusion of mid-cap A-share stocks in the Emerging Market Index, Fernandez noted that the inclusion of mid-cap stocks would depend on the experience of international investors.
“Investing in a country’s stock market means investing in the country’s economy,” said Fernandez. “The inclusion of Chinese large-cap stocks into our index will provide international investors with more opportunities.”
