Early morning, May 14, Beijing Time, the International Well-known Index Company MSCI (MSCI China A Index) announced that it would add 26 A Stocks and Shunho Stock will be included in it. Since then, the inclusion factor of China A Stocks in the index is increased to 10% from 5%.
With the continuous improvement of China’s economical position in the international market, the Chinese stock market has also become an important focus for foreign investors. The MSCI China A Index prepared by Morgan Stanley International Capital Corporation (MSCI) has thus become important investment bases traced by many investment institutions around the world and the individuals. The preparation for the index is also famous for its objectiveness, openness, fairness and practicability. In the past, the stocks included herein were the stocks with a large scale and good liquidity. Among them, there are industry leading stocks such as China Mobile, China Unicom and Sinopec.
At the end of May 2018, A Stocks were officially included in the MSCI Emerging Market Index. As an integral part of the MSCI Emerging Country Index, MSCI China A Index Series consists of a series of national indexes, composite indexes, domestic indexes and non-domestic indexes, and is mainly used for international and domestic investors, including QDII * and QFII * licensees, in the Chinese market.
This time, the inclusion of 26 A Stocks including Shunho Stock into MSCI means the first expansion of China A Index, that the total number of A Stocks rose to 264. After such adjustment, the weight of China A Stocks is 5.25% and 1.76% respectively in MSCI China A Stock and MSCI Emerging Market Index. According to the relevant index plan announced in March, it is planned to have two rounds of expansion adjustments in August and November this year.
Continuous expansion not only reflects the growth and changes of the index itself but also embodies the value recognition of foreign investment in the Chinese stock market represented by the selected stocks. Under the current complex and changing external environment, this move will attract more foreign capital to enter the A stock market.
The MSCI announcement also indicates that the adjustment move will be implemented after the close on May 28, 2019.
