MSCI Expects Initial Flow of USD17 Billion Into China's A-Share Market
Yicai Global
/SOURCE : Yicai
MSCI Expects Initial Flow of USD17 Billion Into China's A-Share Market

(Yicai Global) June 22 -- About USD17 billion to USD18 billion will initially flow into mainland China's stock market after Chinese A-shares are included in the MSCI Emerging Markets Index, Sina.com quoted an MSCI executive as saying yesterday.

MSCI announced it will incorporate China A-shares in its emerging markets index, which tracks stocks with a combined market value of about USD1.6 trillion. After the inclusion, non-Chinese investors that follow the MSCI Emerging Markets Index must buy Chinese A-shares to match the updated version of the index.

Foreign investors own less than 1.5 percent of the total market cap of A-shares due to limited access to mainland China's stock market, said Chin Ping Chia, head of research for Asia Pacific at MSCI. He estimated that USD17 billion to USD18 billion will initially flow into Chinese A-shares after MSCI's A-share addition.

MSCI's decision to add 222 China A-shares to the floating market cap will eventually give A-shares a weight of 0.73 percent in its emerging markets index. Bank of China Ltd. [SHA:601988] and Tsingtao Brewery Co. [SHA:600600] are among those stocks.

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Keywords: MSCI , A-Shares