On 28 February 2019, MSCI announced the expected increase of China A-shares' weight in MSCI Emerging Markets Index to over 3.3% from the current 0.8%.
- MSCI announced the (largely expected) results of its consultation on China A-shares' further weight increase in MSCI Emerging Markets Index: as per its proposal, MSCI will increase China A-shares inclusion factor to 20% from the current 5%, i.e. China A-shares weight will rise to 3.3% from the current 0.8%*.
- In addition to the stocks in the current eligible universe (large caps listed on the Shanghai or Shenzhen HK Stock Connect), mid-caps and ChiNext stocks will now also be in scope. ChiNext is a board on the Shenzhen Stock Exchange that aims to attract innovative, fast growing especially in the high tech sector. As a reminder, the advantage of the HK Stock Connect, which links Hong Kong with Shanghai and Shenzhen, is that it allows international investors to trade China A-shares in Hong Kong without the same restrictions they would face buying shares on the mainland using renminbi.
- Implementation will take place at three steps: at the MSCI index reviews in May, August and November 2019.
- Estimated aggregate trade for index investors at the three-step inclusion process is c. USD 13 billion, which, at each of the three steps, we do not envisage to create a signify market impact.