MSCI To Increase China A Shares in Indexes to 20% from 5%

MSCI said it will increase the inclusion factor of Chinese large-cap stocks to 20% from the current 5% in three steps, in May, August and November this year.

MSCI said it will add Chinese A Mid-Cap shares, including eligible ChiNext shares, with a 20% inclusion factor, to the MSCI indexes in November.

On completion of this three-step implementation, the weighting of Chinese stocks in the MSCI Emerging Market Index will jump to 3.3%, from roughly 0.7% currently.  MSCI Emerging Markets Index will include 253 large-cap and 168 mid-cap China A-shares.

Rival index publisher FTSE Russell and S&P Dow Jones Indices will both start adding yuan-denominated Chinese shares to their global benchmarks this year as Beijing steps up efforts to integrate China’s capital markets into the global financial system.

Fang Xinghai, deputy head of China’s securities regulator, predicted foreign capital inflows to Chinese stocks this year will double to about 600 billion yuan ($89.76 billion).

Reference

CNBC, 2019-03-01, “MSCI to quadruple Weighting of China A-shares in its Global Benchmarks”