China’s domestic stock markets look set to be denied entry into international benchmarks for the fourth year in a row unless Chinese regulators remove “major obstacles” before next June.
Dimitris Melas, head of equity research at MSCI, provider of the benchmark MSCI Emerging Markets index, gave a downbeat assessment yesterday of the prospects for China’s A-shares to be included in the index next year, in spite of the imminent opening of the Shenzhen stock market to global investors.
The inclusion of an initial 5 per cent of A-shares into the MSCI Emerging Markets Index would be seen as a pivotal moment in China’s gradual opening to flows of global capital. Accession to the benchmark, which includes 833 stocks from 23 emerging markets, would oblige fund managers who track the index to invest in Chinese A-shares, triggering huge inflows of capital to China.