Global index compiler MSCI Inc said it had delayed including Chinese shares in its benchmark index because there were still “remaining issues” over market access, but pledged to work with China’s securities watchdog toward inclusion.
Speculation that China’s yuan-denominated “A shares” would be included in MSCI’s Emerging Markets Index following its annual classification review helped push the Shanghai market up this week on hopes it could bring in billions of dollars in extra funds.
However, New York-listed MSCI said there were still some matters that needed to be addressed and it would work with the China Securities Regulatory Commission to resolve them, adding that the stocks would be added as soon as they are resolved.
The news sent the benchmark Shanghai Composite Index tumbling by more than 2 percent in opening exchanges yesterday, but it recovered most of the losses to sit 0.2 percent lower at 5,106.04 at the close in Shanghai.
“Major investors around the world are eager for further liberalization of the China A-shares market,” MSCI managing director and global head of research Remy Briand said in a statement issued on Tuesday.
“We look forward to a fruitful collaboration that will contribute to the further opening of the China A-shares markets to international investors and the inclusion in the MSCI Emerging Markets Index,” Briand said.
While the decision left many disappointed, Chen Xingyu (陳星宇), an analyst with Phillip Securities Group (輝立證券), told reporters: “In the short term, being included in the indices of MSCI is more prestige because it would mean that China’s stock market is getting more attention from foreign investors.”
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