Analysis | MSCI’s A-share nod brings Chinese stocks into the global mainstream
Index compiler says Stock Connect has been ‘a game changer’ for the opening up of the A-share market, after MSCI’s three previous rejections
The addition is widely regarded as a landmark moment in China’s road to opening up its vast domestic financial market to the world, boosting its credibility as a global economic power, and strengthening the international status of its currency.
Ryan Stork, chairman for Asia Pacific at BlackRock, the world’s largest asset manager, said he believed its clients would benefit from the decision to bring “Chinese equities into mainstream investment”, while Thomas Fang, head of China equities at UBS, said there is already “tremendous demand” from its clients to invest in China’s domestic market.
However, serious challenges remain for China’s US$7-trillion domestic stocks before they can be considered truly global, as their valuations are high and there could also be a culture clash when Western investors enter the market, which is often viewed as more speculative than the likes of New York and London.
