Date
25 September 2017
Inclusion of A shares in the MSCI Emerging Markets Index could bring trillions of US dollars of overseas investment into the mainland markets. Photo: Internet
Inclusion of A shares in the MSCI Emerging Markets Index could bring trillions of US dollars of overseas investment into the mainland markets. Photo: Internet

A shares face complex process to qualify for key index: MSCI

Chinese regulators face a complex process to satisfy requirements for mainland-listed shares to join the widely tracked MSCI Emerging Markets Index, an executive at the index provider said.

“You cannot underestimate the complexity of the process involved in making the necessary changes,” Chris Ryan, MSCI’s head of Asia-Pacific, was quoted as saying Monday in a Wall Street Journal report.

The China Securities Regulatory Commission (CSRC) “has to coordinate amongst nine or more government agencies,” he said.

The required changes center largely on foreign investors’ capacity to freely buy and sell the securities and complete transactions in a timely fashion, as well as clarify their title to shares.

MSCI Inc.’s decision this month not to include China’s A shares — stocks denominated in yuan and listed in Shanghai or Shenzhen – in the index was a blow to the mainland markets, as their inclusion could prompt international stock funds to invest trillions of US dollars  in them.

The firm announced June 9 that A shares were “on track for inclusion … after a few important remaining issues related to market accessibility have been resolved”.

– Contact us at english@hkej.com

FL/

EJI Weekly Newsletter

Please click here to unsubscribe