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China shares get MSCI nod in landmark moment

Wednesday, June 21, 2017 - 01:37

China's stocks have taken a major step towards global acceptance, finally winning a long campaign for inclusion in a leading emerging markets benchmark. As Ivor Bennett reports, the move is seen as a milestone for global investing.

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It's a case of fourth time lucky. China finally winning the battle for inclusion in a leading emerging markets benchmark. Access was granted by US provider MSCI to 222 domestic stocks or so-called 'A' shares. It's being seen as a milestone for China and its bid to open up its capital markets. Even if the initial impact will be minimal. SOUNDBITE (English) JASPER LAWLER, SENIOR MARKETS ANALYST, LONDON CAPITAL GROUP, SAYING: "It doesn't have a massive immediate effect. It's still going to be less than 1 percent of the MSCI world index that's represented by the Chinese A shares. But nonetheless it's obviously a direction that things are headed. And I can easily imagine that even within the space of a decade that one percent jumps over 10 percent and becomes very significant." According to MSCI executives, full inclusion to the index would attract more than 340 billion dollars in foreign capital. But they declined to say when that might be. Only, that it depends on the progress of China's reforms. SOUNDBITE (English) JASPER LAWLER, SENIOR MARKETS ANALYST, LONDON CAPITAL GROUP, SAYING: "The pros outweigh the cons now slightly. And so it's not a whole hearted jump into China but it's a recognition of the progress and direction of travel." You only have to go back two years to understand their concerns. When a number of stocks were delisted amidst wild market volatility. But with the risks come rewards. After Wall Street, China's A-share market is the world's largest Worth an estimated $7.5 trillion.

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China shares get MSCI nod in landmark moment

Wednesday, June 21, 2017 - 01:37