External Factors Won't Stop MSCI Boosting China Share Inclusion, Research Head Says
Liao Shumin
DATE:  Aug 07 2019
/ SOURCE:  yicai
External Factors Won't Stop MSCI Boosting China Share Inclusion, Research Head Says External Factors Won't Stop MSCI Boosting China Share Inclusion, Research Head Says

(Yicai Global) Aug. 7 -- MSCI will increase the weighting of Chinese large-cap stocks in its indexes to 15 percent from 10 percent as planned, unimpeded by external factors, according to MSCI China's head of research.

The global index provider will publish its quarterly review at 5 a.m. tomorrow, confirming the move, Wei Zhen told China Securities Journal in an exclusive interview. The only thing that could prevent it happening is if China barred market access to the stocks, he added.

Increasing the inclusion factor of the shares will bring in about USD3.6 billion from passive funds before the market closes on Aug. 27, China Merchants Securities analysts Zhang Xia and Tu Jingqing said in a strategy report.

Now the yuan-dollar rate has surpassed 7, exchange rate risks can be hedged via income swaps, said Li Yu, chief equity investment officer at Gaoteng Global Asset Management. There is no grounding for the yuan's sharp decline and now is a good time for overseas investors as the exchange rate risk is controllable, he added.

Shen Liang, general manager of wealth management at Mercer China, whose clients are mostly long-term institutional investors, said none of the firm's customers had been asking if they should change their mainland share investment plans. Mercer's global allocation perspective for the next three to five years is optimistic about bonds and shares in China and other emerging markets.

Follow Yicai Global on
Keywords:   MSCI