CSRC says world better served by inclusion of A-shares, omission leaves global indexes ‘incomplete’

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CSRC says global indexes would be better served by inclusion of mainland shares. Photo: Xinhua

Enoch Yiu

Published: 11:45am, 15 Jun 2016Updated: 2:56pm, 15 Jun 2016

China’s top securities regulator said Wednesday that a global share index that leaves out A-shares is “not complete”, indicating disappointment over the decision by index compiler MSCI to delay the addition of mainland shares to its widely-followed emerging markets profile.

China Securities Regulatory Commission expressed its reaction in an online statement, hours after MSCI published its 2016 Market Classification Review, explaining that it would delay adding A-shares to its indexes for now.

CSRC spokesman Deng Ge said in a Chinese-language statement: “China is now the world’s second largest economy. The influence of A-shares is on a rising trend gradually in the international markets. Any international index which does not include the A-shares is not complete.”

“While MSCI decided to delay A-shares in its emerging market indices, this would not affect the progress of China’s capital market reform plans to develop a more market-oriented and properly regulated market. Establishing long-term stable and a healthy capital market is in line with our needs,” Deng said.

Global share index compiler MSCI said at in statement at 5am local Hong Kong time that it would not include China’s yuan-denominated A-shares in its emerging market indices, dealing a blow to hopes of new fund flows which could give the poorly performing index in the main Shanghai equity market a lift.

This is the third straight year that the MSCI has rejected A-shares. Reviews in 2014 and 2015 had cited limited foreign access and a lack of transparency in the market as reasons for a delay. The next review will be in 2017.