MSCI adds Chinese 'A-shares'
Investors will gain access to previously restricted Chinese equities, following the addition of new stock options to MSCI indices.
Index provider MSCI announced in a statement on Tuesday that 234 Chinese stocks would be included on its China Index, Emerging Markets Index and Global Standard Index from 31 May.
The companies will represent aggregate weights of 1.26 per cent on the MSCI China Index and the MSCI Emerging Markets Index, respectively.
Among the 234 Chinese companies are Air China, China Eastern Airlines, Bank of China, Kweichow Moutai and Tsingtao Brewer.
In a statement, Fidelity International portfolio manager Raymond Ma welcomed the news and said the inclusion of these “A-shares” would likely ramp up the “participation of foreign institutional investors”.
“In the medium to long term, this will help the A-share market to become more sophisticated, improve liquidity and see it increasingly driven by fundamentals rather than short-term market noise,” Mr Ma said.
He added that the Chinese A-share market was “primarily dominated by retail investors currently,” but MSCI’s inclusion looked set to raise the proportion of institutional investors over time.
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