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The Moment We’ve All Been Waiting for: MSCI A-Share Inclusion

June 26, 2017

It goes without saying that the inclusion of A-Shares into MSCI’s Emerging Markets index was the biggest news of the past week… and quite possibly of the past several years. At the outset, it is expected that USD 17 billion will trickle into China when the shares are added by August 2018. Longer term, inflows could reach USD 500 billion when the pro forma A-Share weight grows from the initial 5%.
Given this massive reallocation, many investors are wondering about the best way to take advantage of the MSCI decision.

In the instance readers are tired of hearing about MSCI, the attached note also covers several other developments from the last week.
1. The drive to minimize “systemic risk” continues as China’s Banking Regulator mandates commercial banks report exposure to overseas acquirers like Anbang and HNA.
2. The days of topsy-turvy Mainland Markets might be coming to a close. China’s Securities Association has released plans to restrict “non-professional” investors from purchasing risky securities.
3. JD.com brought in a record-setting USD 17.6 billion in single-day sales. China’s High Net Worth Individuals have been climbing to new heights as well.

Topics covered: MSCI A-Share inclusion, Deleveraging, Retail Investment, E-Commerce, Private Wealth

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The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles.