A Share In MSCI Is Only A Matter Of Time.

The opening of Shenzhen Hong Kong Tong will enable foreign investors to enter the Chinese market with a scale of more than 6 trillion and 500 billion US dollars and help international investors solve the problem of fund repatriation.

This is the second time in September that MSCI has voicing the issue of A shares.

MSCI has announced that it will launch 20 new indexes by the end of September to measure the potential impact of the MSCI emerging market index on the A share of 5%.

The new index includes MSCI China Index (including some A shares), MSCI China large and Medium Small Cap Index (including some A shares), MSCI emerging market index (including some A shares), MSCI global market index (including some A shares).

Most market participants believe that the new MSCI index is a positive preparation for the future A share in the MSCI emerging market index, which indicates that A share is only a matter of time in MSCI.

A shares broke through in 2014 and 2015, and MSCI failed.

In June this year, A shares broke through the third MSCI emerging market index.

The next index assessment results will be announced in June 2017.

MSCI gives three main reasons.

First, QFII investors' monthly

The quota should not exceed 20% of its net asset value in the previous year. This restriction will bring potential liquidity barriers to investors when they need to cash their customers' funds.

Second, the widespread voluntary suspension of Listed Companies in mainland China has brought liquidity worries to investors.

Although the Shanghai Stock Exchange and Shenzhen Stock Exchange issued a new stock suspension regulation at the end of 5, the effect still needs to be investigated.

Third, the mainland has set up pre approval restrictions on financial products launched by financial institutions in any exchange on the world, leading to uncertainty in investment.

However, at that time, the announcement said that if A share market entry status had significant positive progress before June 2017, MSCI did not rule out the possibility of publishing A shares ahead of the regular cycle of annual market classification review.

In June, when A shares were suspended in the emerging market index, MSCI's concern for A shares did not decrease.

MSCI also said that since the issuance of new rules on stock suspension, the number of shares suspended has dropped slightly.

In recent years, the opening of the market, including the opening of Shenzhen and Hong Kong, and the specific restrictions on the proportion of QFII and RQFII stock investment in principle, have reduced the top two concerns of the three reasons.

According to the MSCI data, if the A share is included in the index of 5%, it will attract as much as $12 billion.

If it is fully incorporated, it will reach 240 billion US dollars, equivalent to more than one trillion yuan, and the introduction of huge amounts of capital will greatly supplement the liquidity of A shares.

Passive capital inflows may occur when A shares are actually included in the index, and active capital inflows may begin in the first few months of the formal inclusion of the index.

This undoubtedly plays a positive role in A shares.

along with

Once again, an olive branch was thrown out. Goldman Sachs, a well-known overseas investment bank, changed its previous empty stance and began to sing more A shares. Its investment rating on Chinese stocks rose from "neutral" to "overweight".

The target price of MSCI China Index also increased, from 60.5 to 70, equivalent to about 9% of the increase.

However, it should be noted that the MSCI China index does not only include shares in the Chinese A share market, but also includes Chinese B shares, Hong Kong stocks and H-share shares of mainland enterprises listed in Hongkong.

Authoritative brokerage research and development report shows that South Korea and China Taiwan region has experienced the full cycle of the MSCI emerging market index from part to total. From the linkage relationship between the turnover of foreign funds and the stock index trend in two regional stock markets, when the foreign capital accounts for no more than 10% of the stock market, the investment behavior of foreign capital has a weak impact on the stock index. When the external capital accounts for more than 15% of the stock market, the impact of foreign capital investment behavior on stock index is significantly strengthened.

The above two places were put into the MSCI emerging market index for the first time in 7 years and 9 years respectively.

Compared with the relatively optimistic attitude of foreign capital,

Many people in the industry believe that whether or not A shares are included in MSCI, the impact on A shares is short-lived. In the long run, internal factors are the key.

Insiders pointed out that even if A shares were successfully incorporated into the MSCI index, its short-term would be more emotional, and the expected boost rather than the real impact.

Huatai Securities expects A shares to be fully included in the period of 3 to 5 years.

The A share's inclusion in the MSCI emerging market index will accelerate the growth of the market microstructure and the proportion of foreign shareholdings. It is estimated that by 2020, the proportion of foreign shareholding will not exceed 6%, and the possibility of reaching 15% of the international general experience threshold is very small, so the impact of foreign capital investment on A shares will be limited.

With the arrival of Shenzhen and Hong Kong's boots, investors are worried that there will be no hot spots in the post market. However, many authorities believe that the opening of Shenzhen Hong Kong Tong will further promote the opening of China's capital market and increase the probability of the latter being incorporated into MSCI.

This to a large extent injected fresh blood into the A shares after the National Day holiday.

There are market participants believe that the stock index continued to decline in the background, many funds, especially institutional funds are actively seeking long-term investment value plate, the risk of capital awareness has greatly improved.

And in the future, pension, QFII, MSCI index funds, and the upcoming Shenzhen Hong Kong Tong, as well as the discussion of Shanghai link, are some value oriented institutional funds, so making long-term investment in value will be the focus of these funds.

That is to say, the capital of market institutions will pay more attention to the rationality of valuation and the quality of the company itself, rather than focusing solely on growth expectations.

Therefore, investors should pay attention to the evolution of the market hot spots and styles as well as timely adaptation and follow-up.