FTSE Russell raises A-shares weighting, more capital flows into Chinese market
Peng Xiaoyun
02:44

Two major investment index compilers, FTSE Russell and S&P Dow Jones Indices, began to implement their latest A-share inclusion steps on Monday. The FTSE Russell will triple the weighting of A-share constituents, while the S&P will add more than 1,000 A-shares to its global benchmarks. 

The moves come after MSCI raised A-share weighting in August. Analysts said that foreign capital may continue to flow into the A-share market as the widely-tracked global indexes start incorporating more Chinese shares.   

The S&P Dow Jones Indices is due to include 1,099 A shares in its global benchmarks with a 25-percent inclusion factor. The A-shares of 147 large cap stocks, 251 mid-caps and 701 small caps come mainly from five sectors including banking, finance, food and beverages, medicine and electronics.  

Meanwhile, FTSE Russell is to raise the weighting of A-shares in its global benchmarks from five to 15 percent, and include 87 new A-share constituents. The move marks the second stage of incorporating Chinese shares into its indexes. Jamie Perrett, director of FTSE Russell index research said the move attracts about four billion U.S. dollars flow into A-shares. 

Perrett commented China is a huge market with huge influence all over the world. And Chinese market has a close tie with British market, FTSE Russell wants to see the relationship go further. "The move provides Chinese investors more options through the index," he said. 

A-share inclusion by the two major investment index compilers are expected to generate 5.1 billion U.S. dollars worth of inflow into A-shares. Analysts said that foreign capital may continue to flow into the A-share market as the widely-tracked global indexes start incorporating more Chinese shares. 

As the world's second largest economy, China has demonstrated its determination to further open up its capital market. The looser limitation of QFII and RQFII also makes foreign investors eager to take a bite of Chinese market.