Date
29 March 2017
Tai Hui says market support measures by the government may create a moral hazard. Photo: HKEJ
Tai Hui says market support measures by the government may create a moral hazard. Photo: HKEJ

Beijing interventions may delay inclusion of A shares in index

The Chinese government’s interventions in the stock market may create a moral hazard that could hinder the inclusion of A shares in a key MSCI index, JPMorgan Asset Management Ltd. said.

Chief Asia market strategist Tai Hui said 51 percent of respondents in a recent survey by the firm said their interest in A shares would increase if the stocks were included in the MSCI Emerging Markets Index, the Hong Kong Economic Journal reported Tuesday.

But Tai said the stock market needs time to adjust to the unconventional support measures that the government has put in place over the past two to three weeks.

And given the precedent of Shanghai-Hong Kong Stock Connect, the regulatory authorities should have been well prepared for the launch of its Shenzhen counterpart, in terms of legal and hardware arrangements, he said.  

Some market players fear the new link may be delayed because of the market turmoil.

Forty-four percent of respondents in the survey of 513 investors said the Shenzhen stock link will affect their investment strategies.

The poll was done between June 1 and June 23.

[Chinese version中文版]

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