CSRC 'welcomes' MSCI inclusion of A-shares in upcoming index review
An emerging market stock index without mainland Chinese stocks would be “insufficient”, said a spokesman with China’s top securities regulator, ahead of a decision due Tuesday by index provider MSCI on whether to include China’s A-shares.
“[China] has been welcoming MSCI’s inclusion of A-shares into its indices. Any stock index tracking emerging markets will be insufficient if it does not include China’s shares... but it will be a business decision of MSCI,” said Zhang Xiaojun, spokesman of the China Securities Regulatory Commission (CSRC) on Friday afternoon at a media briefing in Beijing.
He added that China’s equity and capital markets will continue to undergo reform to become more market-oriented regardless of any announcement by the MSCI during its annual index review.
This is the fourth consecutive year that MSCI, the global equity benchmark provider, has considered the inclusion of A-shares in its emerging market benchmarks. China’s equities could be added to the index as early as next year, if the MSCI is supportive.
The index tracker has introduced an MSCI China Index, which mainly tracks Chinese companies listed in Hong Kong and the US.
However, some analysts believe the chances of inclusion during this review are not good, citing Chinese regulatory hurdles and a conservative political climate as authorities tighten up on the shadow banking sector.
In a separate announcement on Friday, Zhang said the CSRC had issued fines and confiscated illegal income worth 6.14 billion yuan for the first five months of the year, surpassing the 4.2 billion yuan in 2016.
The CSRC has imposed multi-billion yuan fines on several individuals for market manipulation this year, as financial regulators vowed to chase down those who are disturbing market order and taking unfair advantage.
Beijing has strengthened its anti-corruption drive in the financial sector ahead of the crucial 19th Party Congress due to take place this autumn.
In February, Xian Yan, a senior executive of Shenzhen listed Guangxi Future Technology, was fined 3.47 billion yuan (US$505 million) for stock price manipulation and wrongdoings in information disclosure.
In January, Xu Xiang, the former legendary fund manager who was once dubbed “Buffett in China”, was sentenced to five and a half years in prison and fined 11 billion yuan for market manipulation by a court in Qingdao.
A criminal penalty is not included in CSRC’s administrative punishment record.