The recent inclusion of Chinese mainland A-shares into an MSCI index is a milestone in the country’s stock market globalization, and capital flow into China’s stock market is expected to increase, said a legal expert.
A total of 234 large-cap Chinese mainland A-share stocks were recently unveiled by MSCI, a global market research and index company, to be added to its emerging markets index in a two-step process. The first step saw 226 A-shares included on 31 May, and the rest are expected to be included in August.
Melody Yang, a partner at Simmons & Simmons in Beijing, told Asia Business Law Journal that the inclusion of A-shares into MSCI may force passive index funds and exchange-traded funds (ETFs) that track the MSCI emerging market index to adopt a more proactive approach to investments by adding those A-shares into their portfolios.
