The Process Of Bringing A Shares Into MSCI Index May Be Gradual.

< p > there have been reports recently that foreign institutions do not support the inclusion of < a href= "http://www.91se91.com/news/index_cj.asp" > A shares < /a > into MSCI index, mainly concerned about China's current capital controls, capital taxes and other related issues.

In response, foreign institutions interviewed by reporters said that as long as China continues to follow the line of financial reform and opening up, A shares will eventually be included in the MSCI index, but the right to speak of this timetable and openness will be more in the hands of the Chinese government rather than MSCI.

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< p > < strong > A shares may be gradual MSCI < /strong > /p >

< p > earlier, it was reported that Mai Pu Si, executive director of the emerging market and executive director of Templeton emerging market, opposed the inclusion of A shares in the MSCI index. He said that this is a very bad idea, which will make the index become more and more irrelevant.

Reporters sent an e-mail inquiry, he explained, because at present, China's capital controls, investors buy A shares are greatly restricted, which will make the index lose its representativeness, and the shares in the MSCI index should be freely traded. The logic should be that China can achieve the A share in the MSCI emerging market index after opening up the capital, not the other way round.

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Wang Yandong, an investment director of the P fund, questioned the final maneuverability of MSCI's A share index, Wang pointed out that, as the basic requirements for the securities included in the MSCI index were "able to be cast", the current capital control in China was too limited and obviously "non investment".

He believes that the process of MSCI's A share index may be gradual.

The timing and breadth of participation are largely determined by the speed and extent of the Chinese government's control over capital controls.

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Xie P, director general of Ming Sheng and director of Asia Pacific stock market research, said in an interview with foreign media that there are three main reasons for overseas investors' doubts about the index adjustment plan: one is the adequacy of China's QFII (qualified foreign institutional investors) and RQFII (RMB 6.2005 (0.0037, 0.06%) qualified foreign institutional investors); the second is whether China has yet to determine whether QFII levying capital gains tax or details; third, the cross-border flows of overseas institutions are still restricted by the MSCI.

He said that if large investors can get enough quota, they will be happy to see A shares join the MSCI emerging index.

Because of the uncertainty of foreign investment in the purchase of QFII quota and profits tax, some investors who have not yet received the QFII quota have a suspicious attitude.

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< p > < strong > China's capital opening process is the key. < /strong > < /p >

< p > at present, China still has some control under capital terms. Overseas investors can not directly invest in the A share market, only through QFII or RQFII channels.

The QFII and RQFII quota currently approved by China's regulators is about $216 billion, and by the end of February, the amount of QFII and RQFII issued by China has reached about $81 billion 500 million, and some 300 overseas institutions have been granted quota.

Xiao Gang, chairman of the China Securities Regulatory Commission [micro-blog], has said that it will further expand the investment quota of QFII and RQFII this year.

At present, the size of foreign investors' capital accounts for only A of 2%~3% shares.

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< p > regulators also expressed the hope that A shares will be included in the international index and promote the internationalization of RMB. At present, the RQFII pilot will expand from RTHK to London and Singapore. The total amount of RQFII and QFII will be doubled, and the frequency limit of QFII capital remittance will be shortened to once a week.

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< p > Xie Zhengbin said that at present, there are about 1 trillion and 400 billion a href= "http://www.91se91.com/news/index_s.asp" > US dollar < /a > capital tracking index. Once the index weight is adjusted, at least 8 billion US dollars are expected to be put into the A share market.

If we consider the adjustment of A shares in the MSCI Asia Pacific Index and the global index weight, the size of the A share market will reach US $12 billion.

When China's capital market is fully liberalized in the future, the weight of A shares in the MSCI emerging market index will be raised to 10.2%, and the weight of Chinese stocks will be increased to 27.7%.

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< p > Wang Yandong said that whether from the weight of China's economy or the volume of A share market, A shares should be included in the MSCI index.

In addition, the broad coverage of A share companies is also comparable to that of Hongkong H-share and red chips. A shares can better reflect the structural characteristics of China's economy.

Global investors investing in China through A shares will get more effective asset allocation.

Therefore, it is very good for A share to be included in the MSCI index for China's a href= "http://www.91se91.com" > capital market < /a > integration into the world financial system and overseas investors.

As long as China continues to follow the path of financial reform and opening up, A shares will eventually be included in the MSCI index.

But this timetable and openness are more in the hands of the Chinese government than the MSCI.

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