Published Jun 01, 2018 12:51AM ET
Updated Jun 01, 2018 01:30AM ET
China's MSCI Bow Seen High on Symbolism, Low on Immediate Impact
(Bloomberg) -- MSCI Inc.’s inclusion of Chinese-listed stocks, known as A shares, in its global indexes is an important symbolic step, but one that will have limited initial impact, according to analysts and market participants.
China’s stocks could account for 17 percent of the MSCI Emerging Markets Index in five years’ time, from less than half a percent now, Goldman Sachs Group Inc (NYSE:GS). strategist Timothy Moe said in a Bloomberg Television interview on Friday. Total inflows associated with MSCI inclusion will be about $22 billion after the second inclusion day later this year, he said, compared with $60 to $70 billion average daily trading value in China.
“Clearly, the initial impact right here, right now is modest,” Moe said. “But the symbolism in our view is very, very important.”
Market reaction to the inclusion was hardly euphoric on Friday, as the Shanghai Composite Index slid 0.5 percent, heading for its seventh loss in eight sessions.
QuickTake: Why China’s First Steps Into MSCI Are Such a Big Deal
JPMorgan Chase & Co (NYSE:JPM)., Bank of America Corp (NYSE:BAC). and Bocom International Holdings Co. are among other brokerages expecting that the weighting of Chinese stocks in MSCI indexes will increase.
Hao Hong, Bocom International chief strategist:
Goldman’s Moe:
BoAML strategists including head of China equity strategy David Cui:
JPMorgan’s head of China equity strategy Haibin Zhu:
Nicholas Yeo, head of China equities at Aberdeen Standard Investments:
UBS Group AG head of China equities Thomas Fang:
Mobius Capital Partners LLP co-founder Mark Mobius
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.