(Yicai Global) March 14 -- As Morgan Stanley Capital International, MSCI, Inc. will formally include China's selected A-shares in the MSCI Emerging Markets Index in June, the country's publicly offered funds are now closely expanding the layout of related products, with financial regulators have already approved two MSCI China A Inclusion Index funds.
Some 13 fund management companies have so far submitted application for setting up MSCI series index funds, of which seven have applied for the MSCI China A Inclusion Index funds. China Merchants Fund Management Co. and China Southern Asset Management Co. have obtained product release approval earlier than their peers.
China Merchants Fund Management's MSCI China A Inclusion Index fund was issued yesterday, said Bai Haifeng, fund manager at the company. The international experience shows that the equity markets in many countries and regions have gained significantly after inclusion in the MSCI Emerging Markets Index, and related companies will directly benefit from the entry of incremental funds into the market.
The inclusion of China's A-shares in the MSCI Emerging Markets Index will bring in a capital inflow of around USD18 billion in the short term and much bigger incremental funds in the medium and long-term, market estimates suggest.
The MSCI China A Inclusion Index was released in October last year, with a total of 233 companies, mainly big firms in four major sectors -- finance, real estate, consumer and technology. The index has gained 22.6 percent, outperforming the Shanghai Securities Composite Index which rose 6.56 percent year-on-year.