MSCI Begins China-A Inclusion With New Indices

MSCI, the global index provider, this month launched one dozen new indices in a move to expand its China offering ahead of its inclusion of the country’s A-shares for global investors.

“We are proud to announce the launch of this new suite of China indexes. With the increased liberalization and internationalization of the China market, investors have expressed a clear need for more insight and tools to make better informed investment decisions,” Theodore Niggli, MSCI head of APAC index products said in an official statement. “MSCI is committed to providing a full suite of innovative products, including Indexes, Risk Models and ESG ratings to assist in this area.”

The new MSCI China A Indexes will reflect the China A shares opportunity set and follow the MSCI Global Investable Markets Indexes Methodology and the Stock Connect eligibility constraints for large cap and mid cap companies. These indexes, the company says, “expand the range of the MSCI China All Shares Indexes that represent the opportunity set of the integrated MCSI China equity universe where China A shares are fully represented.”

The new indexes will also expand the range of the MSCI China A International Indexes which represent the A share component of the MSCI China All Shares index, excluding the Stock Connect eligibility constraints.

By moving the new index A-Shares into its Emerging Market Index, the opportunity for global investors is becoming clearer, and many will now be tracking the index as a way to gauge insights on China mainland equities.

MSCI’s move officially opens up access to the mainland Chinese stock market for global investors, who typically trade via Hong Kong.