A-Share Weighting May Further Increase, Says MSCI CEO
Yicai Global
/SOURCE : Yicai

(Yicai Global) June 26 -- The number of A-shares incorporated into MSCI global indexes and the proportion of inclusion factors are set to rise in future, said Henry Fernandez, chief executive of MSCI Inc. [NYSE: MSCI] on June 25, as Shanghai Securities News reported.

If the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect are extended, MSCI will also conduct adjustments accordingly and may also incorporate 195 midcaps, he added.

MSCI announced that it will incorporate A-shares into MSCI Emerging Markets Index and the MSCI ACWI World Index as of June 2018 on June 20. It plans to incorporate 222 large-cap A-shares at the initial stage. Based on incorporated factors of 5 percent, the weighting of these A-shares to the MSCI Emerging Markets Index is roughly 0.73 percent, per the statement.

This weighting is now quite low, and the current incorporated factors of five percent might increase. The present proportion of 5 percent is due to factors like the investment principle of certainty, regulation and regulators. If China speeds up its consummation of these areas in the future, MSCI might also lift this proportion, but this depends on issues like the supervision of stock suspensions, the upper limit for investments, and the restrictions imposed by laws and regulations, he stressed. To this end, MSCI will strive for more data access from exchanges via further dialog, Fernandez said.

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Keywords: MSCI , A-Shares