A Shares Entering MSCI Does Not Mean Price Rises.

The United States recently held a meeting to discuss whether the MSCI index, also known as the Ming Sheng index, has accepted the issue of China's A shares. This is the third time that the company has studied the matter.

Like the first two times, they refused to be included in the A shares this time.

Of course, the expression is still euphemistic, saying "postpone" acceptance.

To put it bluntly, MSCI believes that A shares have a distance from the international standard they have identified, so A shares can only be excluded.

When China's stock market started up, it had a prominent "Chinese characteristics" which was far apart from international practice, which made foreign funds fear China's stock market.

The B-share market to attract foreign investment has been stuck for a long time after a short period of prosperity. Some companies that need overseas capital can only raise funds abroad.

After 2000, we began to put forward the requirement of "internationalization", and gradually joined the international system through the series of reforms.

Because of this, only later qualified foreign institutional investors (QFII) were implemented, and overseas institutional investors could officially enter the Chinese stock market.

But the problem is, on the one hand, domestic

It is still at a primary level, and it is difficult to effectively protect the legitimate interests of investors.

On the other hand, there are too many controls and too many audit items in the country, which restrict the development of normal financial activities.

Over the past 10 years, QFII has experienced a relatively active and deserted process, and its scale expansion is very slow.

Hong Kong and Shanghai launched in the first two years are aimed at enabling domestic and foreign securities markets to be realized.

However, from practice, there is a big gap between the actual situation and the original idea. The amount of pactions is largely idle is a good proof.

The MSCI discussion has accepted the issue of A shares, and there has been controversy over the creation of derivatives in Chinese stock markets overseas.

The international practice can only be carried out by the corresponding filing, but at present, China should conduct substantive examination.

Since last year, overseas applications have not been approved.

So some people put forward: how can overseas funds enter the market without financial derivatives as a hedge? Obviously, this is the problem of regulatory rules.

In fact, the MSCI rejected A shares, which is also an important reason.

A shares failed to enter the MSCI announcement day, Shanghai and Shenzhen

The phenomenon of low rise and high walking is understandable.

In other words, even for some particular reason, MSCI has accepted A shares, which does not mean that overseas funds will enter large quantities.

Quite simply, many overseas funds do follow MSCI. In practice, tracking behavior is not always passive, and a large part of them are actively enhanced, that is, they do not necessarily imitate MSCI completely for investment allocation.

Therefore, the view that once A shares enter MSCI, there will be a large number of foreign investors to come to buy, and the price will rise substantially.

For mature investors, he can not ignore the intrinsic value of stocks, nor will he ignore the degree of normalization of the market.

At present, the positions of institutional investors such as funds in the domestic market are not high, and the two balance is at the lowest level in a year and a half. At this time, even if A shares are incorporated into MSCI, I am afraid there will not be much foreign investment.

In the final analysis, there are still many weaknesses in the design of A share system in terms of specific operation.

Especially after the stock market crash last year, in order to stabilize the market, regulators took a lot of temporary measures which violated the principles of marketization. These measures were necessary at that time, but inevitably brought some negative things.

The international market generally disagrees with China's measures to restrict stock index futures trading.

As an extension of this measure, China's failure to examine and approve A shares derivatives trading in overseas markets has become the reason why MSCI refused A shares.

Obviously, if we do not carry out drastic reforms against the existing rules which are not in line with international practices and violate the principles of marketization, it is unrealistic for China's securities market to be truly recognized by international investors. A shares will hardly become a sample of the world's major financial indexes.