News

MSCI’s China A-shares increase could trigger $70bn inflows

China_growthMSCI’s decision to increase the weight of China A-shares in its global benchmarks from 5% to 20% starting in May “could lead to upwards of $70 billion in equity flows into the A-share market in 2019”, according to HSBC Global Asset Management. The other two steps are set to take place in August and November this year. As Beijing eyes greater foreign participation and seeks to become more integrated into the global financial system, better representation in global indices could have a significant effect on how its markets develop over the medium to long-term. “China’s A-shares have a low correlation with global equity markets, providing overseas investors with diversification benefits and allowing them broader access to one of the world’s largest and fastest growing economies and consumer markets,” said Mandy Chan, head of Chinese and Hong Kong equities at HSBC Global Management in a statement “At the same time, increased foreign participation in the domestic market is expected to lead to more market transparency and better corporate governance in China, as companies start to adopt higher accounting standards and disclosure policies,” Chan added. However, MSCI’s decision is not the only factor driving the rally in China’s equity markets said Chan, noting the government’s monetary and fiscal measures. “Finally, besides MSCI, other index providers such as FTSE Russell and S&P Dow Jones will also begin to include A-shares in their global benchmarks this year, attracting more flows from passive funds and other benchmark-tracking portfolios,” said Chan. ©2019 funds global asia

Sponsored Profiles

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Sponsored profile: Bridging the gap

Mar 11, 2019

Private equity is a core part of the business for Caceis’ Hong Kong office, which looks after clients in China and Europe. David Li, chief executive officer, explains why private equity enjoys strong client demand and how it is being used to fund China’s international infrastructure ambitions.

SPONSORED FEATURE: Market knowledge key to fund distribution in Asia

Jan 11, 2019

The highly fragmented investment markets in the Asia-Pacific region require detailed knowledge of each market’s unique characteristics and framework. By Lou Kiesch, Partner, and Marc Noirhomme, Director, at Deloitte Luxembourg.

Executive Interviews

Executive interview: Timing the market

Oct 17, 2019

Amy Cho, Schroders’ Hong Kong chief executive and regional head of intermediary clients, tells Romil Patel about Hongkongers’ love of investing, staying nimble in a volatile market and following...

Interview: Asia’s sweet spots

Jul 05, 2019

As the US-China trade war ramps up with a hike in levies, Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management, tells Romil Patel where he identifies investment value.

Roundtables

Roundtable: Priming for Asia’s growth

Oct 17, 2019

Panellists discuss expanding product capability across Asia-Pacific, the opportunities and regulatory challenges around data and the prospects for ETFs in the region. Chaired by Romil Patel in Hong Kong.

ESG roundtable: Are the ESG stars aligning across Asia?

Jul 05, 2019

Our panel of experts discusses driving higher ESG asset allocation in Asia, growing calls to address the global climate crisis and the importance of governance. Chaired by Romil Patel in Hong Kong.