Global markets react to MSCI inclusion

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A-share’s inclusion in MSCI will help China's financial market open wider to the world, with inflows of foreign investment expected.

MSCI stands for Morgan Stanley Capital International. It serves 99 of the top 100 largest money managers, and provides decision support tools to investors, including indexes, portfolio risk and performance analytics.

As the first step of the inclusion, 234 Chinese A-shares will be added to the MSCI China Index as well as related global and regional composite indexes as of May 31. The index giant said in a release that it had added 11 companies and deleted nine from its MSCI China A-shares inclusion index.

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The firms included in the MSCI China Index will be listed in some global pension funds and ETFs for the first time. Euan Rellie, Senior Managing Director of BDA Partners, said that the inclusion is significant for both China’s A-shares and MSCI.

Besides, the China MSCI entry will connect interested parties with Chinese blue-chips that have injected nearly 20 billion US dollars into the A-share market.

Brendan Ahern, Chief Investment Officer of Kraneshares, said that the inclusion means that China’s A-shares, for the first time, will become a part of the international community. And it’s a positive sign for the Chinese economy.

Ahern also noted that the inclusion will boost market liquidity and sentiment in the short term while helping China's capital market better interact with global markets in the long run.