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Will MSCI include China’s A-shares? Five views

FSA asked several professionals from asset management firms for their view on the MSCI's upcoming decision to include China's A-shares in its emerging market indices.
by Fund Selector Asia
Proposed A-shares weighting

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Source: MSCI

 

CIFM Asset Management, the onshore joint-venture between JP Morgan Asset Management Limited and Shanghai International Trust, believes the A-share markets have improved on the issues raised by MSCI last year – the accessibility, trading suspension mechanism and the pre-approval requirements by Chinese bourses launching financial products.

If the MSCI decides next month to include A-shares, possible inflows could top $9.4bn, according to figures from China International Capital Corporation (CICC).

Notably, CIFM said that in the new proposal by MSCI, the combined weightings from the consumer discretionary (12.9%) and consumer staples (10.6%) have surpassed other ‘old China’ industries such as financials (23%) and industrials (16.1%), reflecting China’s transition to a more consumption-driven economy.

The A-shares’ weighting in the MSCI Emerging Markets Index will grow utimately to 18.1%, from the proposal’s 0.5%, the firm added. “The inclusion is an important milestone for global investors to start looking at A-shares.”

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