In the two videos below, Jack Lin, head of Asia Pacific client coverage for MSCI, and Zhen Wei, the firm’s head of China equity research, discuss the significance of the journey to the inclusion of China's A-shares in the MSCI Emerging Markets Index. This has been an especially move given the interest among institutional investors in the domestic capital markets.
With the capital markets in China being one of the drivers of recent performance, trade and investment within emerging market economies, institutional investors may seek to re-examine their equity exposure to China, once they choose an approach that suits their objectives, convictions and constraints.
Continued discussions, consultations and exchanges between market participants will continue to facilitate a better understanding of China’s changing role in a transparent manner.
Ultimately, institutional investors are bidding for greater market access. And the top of their wish-list, based on our market consultations, are: the removal of quotas and capital repatriation restrictions; availability of index futures and other risk management options; changes to the short settlement cycle of China A-shares; an omnibus trading mechanism in Stock Connect; and greater alignment between onshore China and Stock Connect holidays.