LINE

    Text:AAAPrint
    Economy

    A-share market to open up further

    1
    2018-08-15 14:11:52China Daily Editor : Li Yan ECNS App Download
    An investor checks stock prices at a brokerage in Fuyang, Anhui Province. (Photo by Lu Qijian For China Daily)

    An investor checks stock prices at a brokerage in Fuyang, Anhui Province. (Photo by Lu Qijian For China Daily)

    The A-share market is ready to embrace further opening-up to international investors as the benchmark Morgan Stanley Capital International index starts a new round of inclusion of A shares.

    The MSCI announced early on Tuesday morning that it will implement the second step of the partial inclusion of China's A shares in the MSCI China Index and relevant composite indexes such as the MSCI Emerging Market Index.

    The inclusion will take effect when the market closes on Aug 31. The next half-year index review is scheduled on Nov 13.

    A total of 10 companies will be added in the second step, with the total China A shares included in the MSCI China Index reaching 236. With that, the constituents' weight in the MSCI China index will rise to 5 percent from the 2.5 percent realized in June. It also equals to 0.75 percent weighting on the MSCI Emerging Markets Index.

    The 10 newly added companies include industry heavyweights such as China Shenhua Energy Company Ltd, China Unicom, ZTE Corporation, software company Yonyou Network and consumer electronics giant TCL Corporation.

    But the MSCI warned that companies will be eliminated from its index if they still suspend trading the day before the adjusted inclusion takes effect.

    Industry insiders said the second step inclusion will further bring an inflow of foreign capital in succession to that which started in late May.

    The Shanghai Stock Exchange wrote in a note in late May that the foreign capital inflow into the MSCI included A shares via the Shanghai Hong Kong Stock Connect surged substantially to 11.27 billion yuan ($1.64 billion) on May 31 - the day prior to June 1 when the MSCI index took effect. That number hit the record high during the first half of this year, which was also 2.5 times the average amount of the monthly total.

    Analysts from China Merchants Securities wrote in a report that the A-share market's 5 percent inclusion will hopefully bring another 40 billion yuan of investment into the Chinese stock market. Experts from Shenwan Hongyuan Securities predicted that the additional inflow of foreign capital will amount to 1.8 trillion yuan in the long run if the A shares could be 100 percent included into the MSCI index.

    Jack Lee, head of China A-share Research at asset management company Schroders Plc, said that more overseas capital is sure to flow into the A-share market, especially focusing on the consumption sector, which is closely related to economic growth.

    MSCI is one of the most influential stock indices worldwide that is adopted by over 97 percent of the world's top asset management firms. With its move in China, another major industry indicator FTSE Russell, based in London, said that it would include the A shares in September with higher weighting.

    Shi Bin, head of China Equities at UBS Asset Management, said that overseas investors will more gradually understand the structural changes undergoing in China and actively look for opportunities in the A-share market as it becomes more open.

    "Although the inclusion into the MSCI index will not boost A shares in the short term, it will improve the market's structure and performance in the long run as the A-share listed companies have to face stricter supervision and compliance regulations in line with international standards," he said.

    More importantly, Shi pointed out that the inclusion also reflects the international market's acknowledgement of the achievements that China has made with its reform and opening-up policies. Overseas investors have come to realize that the onshore Chinese market is more closely connected to the global financial system after the introduction of the stock connect mechanism between Shanghai, Shenzhen and Hong Kong, he said.

      

    Related news

    MorePhoto

    Most popular in 24h

    MoreTop news

    MoreVideo

    News
    Politics
    Business
    Society
    Culture
    Military
    Sci-tech
    Entertainment
    Sports
    Odd
    Features
    Biz
    Economy
    Travel
    Travel News
    Travel Types
    Events
    Food
    Hotel
    Bar & Club
    Architecture
    Gallery
    Photo
    CNS Photo
    Video
    Video
    Learning Chinese
    Learn About China
    Social Chinese
    Business Chinese
    Buzz Words
    Bilingual
    Resources
    ECNS Wire
    Special Coverage
    Infographics
    Voices
    LINE
    Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
    Copyright ?1999-2018 Chinanews.com. All rights reserved.
    Reproduction in whole or in part without permission is prohibited.
    主站蜘蛛池模板: 稷山县| 满城县| 彝良县| 景德镇市| 阿合奇县| 达日县| 综艺| 阿拉善右旗| 厦门市| 黄大仙区| 兴山县| 蛟河市| 双牌县| 汶上县| 梅州市| 柞水县| 鹤岗市| 巴彦县| 沂源县| 汝阳县| 平舆县| 西平县| 崇仁县| 武穴市| 台南市| 云浮市| 拜泉县| 越西县| 陆丰市| 林口县| 东丽区| 白水县| 南乐县| 平利县| 衡水市| 水城县| 盖州市| 德昌县| 陇南市| 平邑县| 当雄县|