(CBN - Global) May 17 -- Bridgewater Associates, the world's largest hedge fund with USD169 billion in assets under management, has set up branches in Beijing and Shanghai, in a move that may anticipate the inclusion of A-shares in MSCI Inc.'s benchmark Emerging Markets Index in the near future.
Bridgewater holds 5.5 percent of shares in the iShares MSCI Emerging Markets ETF (EEM), making it the EEM's biggest institutional investor, and accounts for 11 percent of transaction volumes in the EEM.
In March, New York-based MSCI resumed talks with investors on whether anti-competitive behavior by China's exchanges is pre-empting the inclusion of A-shares in the index provider's benchmark Emerging Markets Index, with the aim of announcing its decision in June. MSCI estimates that the addition of A-shares would attract USD20 billion to the Chinese market in the short term, and the number could increase to USD400 billion over time.
During a March visit to Beijing, Bridgewater founder Mr. Ray Dalio said China would remain a stabilizer rather than a risk for the world economy.
The Emerging Markets Index tracks Chinese companies listed in Hong Kong and from last November US-listed Chinese stocks such as Alibaba Group Holding Ltd. [NYSE:BABA], JD.com Inc. [NASDAQ:JD] and Sina Corp. [NASDAQ:SINA] were added to the index.
MSCI has been monitoring the performance of Chinese firms since 2005 in its Morgan Stanley Capital International China Index, which mainly targets Chinese investors.