Investors react to MSCI

Commission, said in a television interview Wednesday evening that the MSCI would include more A-share stocks in its key index.

He added that quotas for Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor programs — among the major channels for foreign investors investing in China’s market — were likely to be expanded accordingly.

Fang said it is likely that 30 percent of A-share listed stocks will be included in the MSCI key index. Currently more than 3,000 shares are listed on mainland’s A-share market.

The MSCI inclusion “paves the way for global capital inflows into China’s A-shares,” rating agency Moody’s said in a report on Wednesday, projecting roughly $11 billion in near-term fund inflows into mainland stocks from funds benchmarked to the EMI.

Citi China Securities Services said in a report that the MSCI inclusion of A-share stocks had long-term significance.

“Globalization of China’s capital markets is a gradual and inevitable process,” it said.

The firm said it believed that there may not be a sharp increase in the number of new QFII or RQFII license applicants due to the MSCI index inclusion, but foreign funds were likely to increase their investment quotas in response.

“We also expect to see an increase in the number of smaller overseas institutional investors accessing the A-shares via the Connect programs for the first time,” the report said.

Reuters contributed story.

to

the