(Yicai Global) June 23 -- Global index, analytics and data provider FTSE Russell has completed the first-phase inclusion of China's domestically traded A-shares into its global equity indexes. Plans for added phases will be based on future market developments, it said today.
After the first phase of inclusion, the firm added 25 percent of the investable market cap of 1,051 small, medium, and large cap China A-shares to the FTSE Emerging All Cap Index. This is the first international index to cover different sized companies into its inclusion, per the London-based company's statement.
Following the September 2018 reclassification of A-shares to Secondary Emerging market status, FTSE Russell implemented the first phase across four separate tranches beginning June 2019.
Today's successful completion of the first phase of China A-shares inclusion into our global equity benchmarks is a landmark in the development of China's capital markets, enhancing access for international investors. Over 20 years ago, FTSE Russell was the first international index provider of Chinese mainland benchmarks and we look forward to continuing to work with customers to provide benchmark and analytic solutions across both equity and fixed income investments in the future, said Waqas Samad, the firm's chief executive and group director of Information Services with the London Stock Exchange Group.
"We have received positive feedback from index users on our approach throughout the process. We will continue to work with our customers and regulators to assess the timetable for future phases of A-share inclusion," said Jessie Pak, managing director, FTSE Russell and head of Information Services, Asia-Pacific at LSEG.
The inclusion of the fourth tranch officially took effect on June 22, and passive funds were all in place before the close on June 19, with a net inflow of nearly CNY20 billion (USD2.83 billion) in northbound funds from Hong Kong to Shenzhen and Shanghai. The cumulative net inflow of the funds going north has been about CNY117 billion since the year's start.
Editor: Ben Armour