MSCI delays A-shares inclusion in EM index

MSCI delays A-shares inclusion in EM index

MSCI has delayed the inclusion of Chinese A-shares in its Emerging Markets index, citing a desire from investors for further improvements first.

The index provider found the country’s authorities had introduced “significant improvements in the accessibility of the China A-shares market for global investors”, with progress made around issues including capital mobility restrictions and trading suspension regulation.

However the consultation held this year also revealed a desire among institutional investors for further changes, MSCI managing director Remy Briand said.

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The company noted investors had “generally stressed the need for a period of observation” to assess the effectiveness of recently implemented measures, while other hurdles such as a 20 per cent monthly repatriation limit remained.

The proposal to include A-shares in the index will appear in MSCI’s 2017 market classification review, with the company adding: “MSCI does not rule out a potential off-cycle announcement, should further significant positive developments occur ahead of June 2017”.