(Yicai Global) May 9 -- Morgan Stanley Capital International (MSCI) recently confirmed it plans no adjustment to current methodology for the MSCI China A International Index.
MSCI previously mooted lowering the number of A-share stocks included from 448 to 169, Hong Kong financial information services firm Finet reported.
These large-caps all trade under the stock connect arrangements, and the drop would improve A-shares' chances of admission to the MSCI index. An alternative plan also entails dropping A-shares' weighting in the MSCI China Index from 3.7 percent to 1.7 percent, and its weighting in the emerging markets index from one percent to 0.5 percent. MSCI will announce the outcome of its semi-annual A-Share Index review on May 16, and the Emerging Markets Index review next month.
The MSCI China Index currently only covers non-mainland-listed Chinese companies -- most in Hong Kong. Index weighting MSCI assigns to individual firms greatly influences the investment allocations of many international fund managers, so inclusion of the A-share market in the MSCI The China index has remained a central topic among investors in recent years. Admission of A-shares to the index or an increase in their weighting will trigger a bull run on the Chinese stock market, most commentators believe.