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Economy

A-share weight gain in MSCI to draw 20 bln USD of capital inflows: report

May 14, 2019


Abstract : Global index provider MSCI's latest move to increase the inclusion factor of China A shares in its global benchmarks would lead to around 20 billion U.S. dollars of capital inflows, China Securities Journal reported.

BEIJING, May 14 (Xinhua) -- Global index provider MSCI's latest move to increase the inclusion factor of China A shares in its global benchmarks would lead to around 20 billion U.S. dollars of capital inflows, China Securities Journal reported.

The MSCI announced Tuesday that it will raise the inclusion factor of all large-cap China A-shares in the MSCI indexes from the current 5 percent to 10 percent, effective after market close on May 28.

Hiking the inclusion factor by 5 percentage points is likely to lead to around 20 billion dollars of fresh capital to the market, including 4 billion dollars of passive inflows, according to the report, citing estimates from China International Capital Corporation Limited (CICC).

Sinolink Securities expects the change to trigger an inflow of around 18.7 billion dollars.

The MSCI has also decided to add 26 China A shares to the MSCI China index, including 18 shares from the ChiNext, China's NASDAQ-style board of growth enterprises.

The inclusion will bring the weighting of China A shares in the MSCI China index and MSCI emerging market index to 5.25 percent and 1.76 percent, respectively.

The latest move followed the MSCI decision in March that it will increase the inclusion factor of A-shares to 20 percent in a three-step process in May, August and November, each time upping the representation of Chinese large-cap stocks by 5 percentage points.

Based in New York City, MSCI provides equity, fixed income, hedge fund and stock market indexes, and asset portfolio analysis tools for global investors.

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Keyword: A-share MSCI

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