MSCI is going to review its widely used Emerging Markets index on June 14. There are expectations that MSCI will be adding Chinese shares to its index, due to the importance of the China market. The move may reduce weightage of countries such as India.
Qi Bin, the head of international cooperation at the China Securities Regulatory Commission (CSRC), made the remarks as the US index publisher prepared to decide on June 14 whether to include mainland-listed “A” shares in its emerging market index.
“A global stock index without (Chinese) A shares is incomplete. We take a very open attitude to MSCI’s decision. But including A shares is inevitable. You can’t wait for the market to be perfect … You can’t wait too long,” Qi said.
As on May 31, 2016, China was having a weightage of 24.36 per cent in the MSCI Emerging Markets index, while South Korea, Taiwan, India, South Africa and Others were having 15.3 per cent, 12.35 per cent, 8.58 per cent, nd 7.17 per cent and 32.24 per cent weightage in the index.
Market expert, G Chokkalingam, founder, Equinomics Research & Advisory said, “The move will not impact Indian sentiments as Chinese growth has not improved at all. India fundamentals are stronger than Chinese economy. If MSCI adds Chinese stocks in the index it will only impact things for a day or two in Indian equity markets. Overall, the move will not impact domestic equity markets in the medium-to-long run.
Last year, MSCI postponed including Chinese shares in its index, partly due to concerns over accessibility for foreigners, liquidity and the maturity of the China market.
(With inputs from Reuters)