Mainland stocks rose after MSCI inclusion

Chinese mainland stocks edged up on Wednesday as investors gave a lukewarm reception to a move made by index provider MSCI to add some mainland shares to one of its key benchmarks, with traders saying a “Yes” decision had already been priced in.

But Hong Kong stocks fell on Wednesday on fears that MSCI’s decision to include more mainland stocks in a key benchmark index will threaten the financial center’s role as a key global investor gateway to the mainland.

Mainland’s blue- chip CSI300 index rose 1.17 percent to 3,587.96 points, while the Shanghai Composite Index gained 0.52 percent to 3,156.21.

While the CSI300 lagged a global stock rally earlier this year, it had surged nearly 8 percent since mid- May, partly on expectations of the MSCI decision.

“We believe the inclusion of A- Shares in the MSCI will give a significant boost to [ the Chinese mainland’s] stock market in the long run,” said Kathryn Shih, president, Asia Pacific at UBS.

Rakesh Patel, head of Asia Pacific equities at HSBC, said the initial impact from the inclusion could be limited, expecting about $ 12- 14 billion of flows from active and passive investors in the first year after inclusion.

Consumer and financials posted solid gains, rising 2.7 percent and 0.7 percent, respectively.

The US index publisher will add 222 yuandenominated A shares to its MSCI Emerging Markets Index, with an initial weight of just 0.73 percent.