Mainland China stocks end higher after MSCI’s revised proposal for A share inclusion
MSCI proposed cutting the number of A-share firms in the Emerging Market Index to 169 from 448, with weighting down to 0.5pc from 1pc
Mainland China stock markets ended slightly higher on Thursday after global index maker MSCI issued a revised proposal to include A shares in its Emerging Market Index.
The Shanghai Composite Index experienced a “V-shaped” curve to end 0.1 per cent higher at 3,248.6, the CSI 300 Index closed up 0.4 per cent to 3,462, and the Shenzhen Component Index gained 0.3 per cent to 10,583.
Separately, the Hang Seng Index in Hong Kong closed virtually flat at 24,327.7 while the Hang Seng China Enterprises Index edged up 0.3 per cent to 10,487.5.
MSCI published a new consultation paper on its website regarding the inclusion of mainland Chinese A shares into its Emerging Market Index. The paper proposes cutting the number of A-share companies listed in the MSCI Emerging Market Index to 169 from 448 under last year’s proposal, while the weighting would fall to 0.5 per cent from 1 per cent.
The only companies considered for inclusion would be large-cap shares already accessible to foreign investors through the Shanghai and Shenzhen stock connect schemes with Hong Kong, according to the new proposal. MSCI will make a decision in June.
“The new proposal indeed increases the chances for inclusion after three years of failure but the impact of the inclusion is going to be very trivial...more like a symbolic move,” said Zhu Bin, analyst at Southwest Securities.
In China’s B-share market, which is traded in US dollars primarily by foreign investors, the Shanghai Stock Exchange B Share Index at one point slumped 4 per cent, but recovered to close at 343.4, down 1.8 per cent.
