Foreign investors bet billions on China blue-chips joining MSCI index

Foreign investors bet billions on China blue-chips joining MSCI index

"With or without the inclusion, China's stock market, and our capital market as a whole, will not alter its direction of reform toward market-oriented, law-governed and global development", said Zhang Xiaojun, a spokesman for the China Securities Regulatory Commission.

That said, market participants expect the new weighting of Chinese A-shares in the MSCI Emerging Markets Index will be far below 1%, which means the amount of money flowing into Chinese equities because of its inclusion in the MSCI Emerging Markets Index will be much lower than the amount stated above.

The top Chinese securities regulator is cracking down on illegal stock market activity, handing out more fines over the first five month of the year than in all of 2016.

The current MSCI EM index can be turned into an "MSCI EM ex-China index", similar with those Asia ex-Japan indices in the markets.

The ETF closed up 1% Monday at $41.63, and the Vanguard FTSE Emerging Markets ETF (VWO) rose 0.7%, while the iShares China Large-Cap ETF (FXI) was up 1.4% and the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) was up 0.9%.

According to the Financial Times China's $US7 trillion A-share markets and its $US9.3 trillion domestic bond market (the world's second and third largest respectively) are off limits to most foreign investors "because governance problems dissuade index providers from including them in their benchmarks". It is a far smaller slice of the stock investment universe - about 10 percent.

Total turnover of stocks in the two indices shrank by 3.4 percent to 351 billion yuan (51.6 billion US dollars) from the previous trading day. "Not to mention that the inflows will take place in a slow process".

"Inclusion would be an important milestone for China's equity market and may trigger a short-term rally due to increased expectations of fresh liquidity entering the onshore market", she added.

Portugal vs Mexico: VAR not working well - Santos
After an explosive opening period, the second was a much tamer affair as both teams squandered half chances as the tempo dropped. Mexico's all-time top scorer grabbed his 48th worldwide goal from 93 appearances after some awful defending by Portugal .

The views expressed are the views of the author, not necessarily those of Thomson Reuters. MSCI's decision is expected Tuesday after the close of USA markets.

The MSCI is set to decide on 20 June whether to include A-shares in the EM index for the first time, after choosing to put off the move past year.

If MSCI says "No", A shares may react with a 1 per cent decline, which is still "minor", the analysts said.

China's fourth attempt at cracking into MSCI Inc.'s benchmark share indexes comes with its best chance of success - and the least at stake.

The index on which the iShares MSCI Emerging Markets exchange-traded fund (EEM) is poised for some tinkering, but it is technical factors that may spell a pause for the ETF, one observer says.

On the other side, a few investment institutions hold more conservative views on the probability of MSCI's acceptance.

"The inclusion could bring about 60.7 billion yuan into the (A-share) market, but the impact would be limited if the inclusion does not happen", Haitong Securities wrote.

Related News:

  • Trump Condemns 'Brutality' of N. Korea Following Warmbier's Death

    Trump Condemns 'Brutality' of N. Korea Following Warmbier's Death

    Following the death of former North Korea detainee Otto Warmbier , President Donald Trump has spoke out on the tragedy. Washington had offered dialogue, but only on the condition that North Korea completely denuclearizes.

    Bank of England chief downplays chance of interest rate hike

    The pound fell after the Bank of England governor said he did not think that now was the time for interest rates to rise. On Brexit, Hammond said the Conservative Party was committed to keeping taxes as low as possible to encourage growth.

    Tech CEOs Meet With Trump On Government Overhaul

    The council also seeks to boost the security of U.S. government IT systems and wants to learn from private-sector practices. In remarks to kick off the event, Kushner said he hopes the technology council will work to update American systems.
  • Lions coach Farrell demands defensive lift in Dunedin

    The Lions have made a statement that they are going to be competitive come Test match time and that's critical for our great game. You saw the style of the Lions against the Crusaders , they took the points that were on offer, almost.

    Grenfell Tower Fire Victim Count Increases, Police Investigate Possible Crimes

    The deadly blaze has mushroomed into a political crisis, testing the fragile government of Prime Minister Theresa May . The fire has prompted warnings about fire safety risks in many other council tower blocks built in the same era.

    Russian Federation warns USA after Syrian jet downed

    The White House also said it would work to keep lines of communication open with Russian Federation amid the new tensions. Associated Press writers Nasser Karimi in Tehran and Jon Gambrell in Dubai, United Arab Emirates, contributed.
  • Family Says Otto Warmbier, American Released By North Korea, Has Died

    American student Otto Warmbier is presented to reporters on February 29, 2016, in Pyongyang, North Korea, following his arrest. The China-based tour group said in a statement that despite constant requests, they were denied the opportunity to meet him.
    Congressman injured in shooting upgraded from 'critical' to 'serious' condition

    Congressman injured in shooting upgraded from 'critical' to 'serious' condition

    Sava said he told Scalise's family: "I am not declaring victory until he's playing ball in his backyard with his family". His condition has improved after undergoing two surgeries and an additional procedure to control bleeding.

    English cardinal after mosque attack: 'Repudiate hatred and violence'

    Vehicles have also been also used to attack the public on London's Westminster Bridge , in Nice, France, and in Berlin. Searches are being carried out at a residential address, where Mr Osborne is listed as living, in the Cardiff area.
  • Apple, Microsoft, Google, others, meet Trump on government overhaul

    Apple, Microsoft, Google, others, meet Trump on government overhaul

    Facebook (FB.O) CEO Mark Zuckerberg was invited but could not attend because of a conflict, the company said. Mastercard Inc (MA.N) CEO Ajay Banga said his company wanted to assist with cyber security issues.
    Real Madrid president Florentino Perez 'not contemplating' Cristiano Ronaldo's departure

    Real Madrid president Florentino Perez 'not contemplating' Cristiano Ronaldo's departure

    Michael Ballack expects Cristiano Ronaldo to remain at Real Madrid amid rumours linking the Portuguese superstar with a shock exit. "It starts with the media".
    Talks begin over British divorce from European Union

    Talks begin over British divorce from European Union

    He said that's essentially putting jobs and the economy ahead of immigration which is a contentious issue for Britain. The association represents 3,200 businesses with a million employees in Germany making industrial machinery.


Most liked

Bernie Sanders Ally Tom Perriello Loses Virginia Gubernatorial Primary to Ralph Northam
Tom Perriello , speaks to supporters at an election night party at the State Theatre Tuesday, June 13, 2017 in Falls Church, Va. Ralph Northam easily won the Democratic nomination for governor of the southern state, besting challenger Tom Perriello .

Spotify Is Now Testing Sponsored Songs
It is not immediately clear how Spotify will charge the labels-whether it will be based on impressions, actions, listens, etc. If Sponsored Songs catch on and get implemented as a standard feature, they could be a serious boon to labels and artists.

Punjab waives farm loan, AAP says 'too little'
He reiterated the commitment to provide free power to farmers but appealed to big and well-to-do farmers to give up power subsidy voluntarily.

LeBron lauds unrivalled Warriors firepower
They also made 13 a game, second only to the long-ball-happy Rockets, giving them a unsafe extra dimension besides LeBron. The players are duping refs into making bad calls and it's embarrassing for the game.

Britain's Labour Party says PM May has no authority before Brexit talks
She said: "We want to see an administration set up again that will last and one that will last for all of the people of Northern Ireland".

Real president Perez "not contemplating" Ronaldo departure
He told Spanish radio station Onda Cero (h/t the Mirror's Joe Mewis ): "The clause for Cristiano is £1 billion". And according to Spanish sports daily Marca , Ronaldo has told his teammates: "I'm leaving Real".

Whole Food shares keep rising, leading to bidding war speculation
Whole Foods , with Amazon backing, will expand brick and mortar much more quickly because of the financial power of Amazon . Amazon has made a huge splash and acquired organic supermarket chain Whole Foods for $13.7 billion .

Conor McGregor V Floyd Mayweather Super-Fight: 5 Positives & 5 Negatives
The 12-round fight will be fought at 154 pounds and will mark a return to the ring for Mayweather after an nearly two-year layoff. Rumors and reports of a fight have been floating for nearly a year, with both fighters openly acknowledging a potential bout.

Democrats seek first big win of Trump era today in Georgia
The Dems want to stop tax cuts, good healthcare and Border Security .Their ObamaCare is dead with 100% increases in P's. In what's become the most expensive House race in history, both Democrats and Republicans have tons at stake.

Russia: US Planes in Syria Are Now 'Targets'
After the terrorist group is eliminated, it is likely that the rebels and government forces will faceoff in a deadly showdown. Russian foreign defense minister Sergei Ryabkov also accused the USA of helping terrorists by shooting down the Syrian plane.

Camille Cosby Criticizes Judge, District Attorney
When asked if Cosby had a message to share with his accusers, Wyatt bristled: "This is not about all the women, this was about Ms. By Thursday morning, after almost 30 hours of discussions spanning three days, the jurors told O'Neill they were at a stalemate.

Kluber fires 3-hitter as Indians blank Orioles 12-0
In the fourth inning alone, they tallied four doubles off Bundy, who had never allowed more than three doubles in an entire game. Jackson contributed a two-run double plus a bloop run-scoring single, and Santana added a two-run homer and a sacrifice fly.

Man rams police vehicle in Paris; attacker likely killed
On Wednesday, the French government is to unveil a new anti-terrorism law, created to allow the state of emergency to be lifted. Previous major attacks targeted the Paris offices of the Charlie Hebdo satirical magazine in January 2015.

NSW Treasurer Dominic Perrottet announces budget's health funding
The government has allocated $7.7 billion over four years, with $1.5 billion in works allocated for the 2017-18 financial year. Budget delivered: NSW Treasurer Dominic Perrottet announced a surplus of $4.5 billion.

Sarfraz hopes lifting of coveted trophy ends Pakistan exile
Fakhar lofted Ravindra Jadeja over long-on for six and got to three figures by sweeping Ravichandran Ashwin to the boundary. India had three players, batsmen Virat Kohli and Shikhar Dhawan, together with seamer Bhuvneshwar Kumar, in the ICC team .