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What to Think About the Moody’s Downgrade and MSCI’s Upcoming Decision Date

May 30, 2017

Several announcements spurred China chatter over the past few days:

1. MSCI announced June 20th as the day we’ve all been waiting for: decision time for A-Share EM inclusion. The release of their revised proposal in March made inclusion seem like a no-brainer, but CEO Henry Fernandez’s “a lot of issues” remark last week was less than reassuring…
2. Moody’s China debt downgrade was a similarly hot topic among commentators and talking heads, though the market remained generally unconcerned. China 5-year sovereign CDS barely moved following the announcement.
3. And for some much-needed good news, regulators hinted at two promising reforms in the pipeline: resumption of the QDLP program and resumption/commencement of equity index options and commodity futures trading– for domestic, institutional, and foreign institutional investors alike!

More detailed discussion of these topics can be found in the attached note.

Topics covered: Moody’s Debt Downgrade, MSCI A-Share Decision, QDLP Program, Stock Market Reform, Sino-Foreign Relations

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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.