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在线翻译:
szdaily -> Markets -> 
MSCI to add A shares to benchmark gauges
    2018-05-15  08:53    Shenzhen Daily

CHINA’S stock market is about to go global like never before.

On June 1, MSCI Inc. will add more than 200 locally listed Chinese firms to benchmark equity gauges that guide the investment of US$12 trillion.

The New York-based index compiler will publish its final selection of A shares, putting many of them on the buy lists of international retirement plans, endowments and exchange-traded funds for the first time.

It’s a major symbolic win for China, which for years has craved greater global recognition of its financial markets and a bigger international role for its currency. Many foreign investors are keen to increase their exposure to a US$13 trillion economy that’s growing twice as fast as the United States.

“Overall, the addition of China A shares is symbolic of China’s increased liberalization of financial markets and represents a new era where China is a true player in global markets,” said Eleanor Creagh, market strategist for Saxo Capital Markets.

While China’s initial weighting in the MSCI Emerging Markets Index — at 0.7 percent — is minuscule, that may grow to as much as 14 percent over time as market rules align with international standards, Creagh said. The initial inclusion is expected to channel around US$17 billion in passive funds into the world’s second-biggest equity market and inflows could rise to US$35 billion in coming years, MSCI has said.

The inclusion into MSCI indexes has been several years in the making. Institutional investor worries around accessibility halted earlier efforts by MSCI to add A shares to its Emerging Markets Index and other gauges. After 2013, when MSCI added them to a review list, three annual consultations ended with a “no” from investors. Trading mechanisms, tax treatment and capital withdrawal rules were among concerns raised, the consultations found.

Progress on trading suspension rules was identified by MSCI as a precursor for further inclusion. As China has steadily been expanding stock links between the mainland and Hong Kong, making it easier for international investors to own A shares, the resilience of the trading system will also be a factor in greater inclusion, MSCI said.

China has been laying the groundwork for greater global inclusion for years, including a recent increase in daily trading limits for investing through the links. Foreigners’ purchases of mainland shares via the stock links surged to a record last month. (SD-Agencies)

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