If the proposed new rules are applied, the number of Chinese stocks that would have to be included would drop dramatically by two-thirds to 169 stocks leading to a sharp drop in market turnover, a crucial source of costs for passive funds.
Bloomberg: MSCI Shuns Most of China's $7 Trillion Market in Index Proposal
Only 169 mainland China-listed companies will be considered for inclusion by benchmark gauges, down from 448 under a previous proposal, and all will be large-cap shares currently accessible to foreign investors through exchange links with Hong Kong. The weighting of yuan denominated stocks, known as A shares, would be just 0.5 percent of the MSCI Emerging Market Index, half the previous suggested level, according to a consultation paper published on MSCI’s website Wednesday.
No comments:
Post a Comment