China A-shares make MSCI debut: What analysts are saying


Close to 230 China A shares debuted on index provider MSCI’s emerging markets benchmark on Friday, a move investors expect will attract billions of dollars in inflows to the mainland market.

The partial inclusion of the A shares — yuan-denominated stocks traded on the mainland — to MSCI’s Emerging Markets Index takes place in two phases, with the second step only coming in August.

Among the names included were a mix of financials, consumer and developer names such as Kweichow Moutai, which makes premium liquor; BYD, an electric vehicle manufacturer; China’s largest lender Industrial and Commercial Bank of China and Ping An Insurance.

ZTE, the telecommunications equipment company currently banned from purchasing U.S. technology, and four other names were not added, MSCI said earlier in the week.

Upon completion of initial A shares inclusion, China’s proportion of the index — which currently includes shares of Chinese companies listed in Hong Kong — will stand at 31.3 percent. Full inclusion would see A shares account for 16 percent of the index and China making up 42 percent of the index.

Friday’s inclusion, however, failed to buoy sentiment in greater China markets, which slipped in afternoon trade: The Shanghai composite declined 0.53 percent and the smaller Shenzhen composite fell 0.9 percent. Hong Kong’s Hang Seng Index was lower by 0.17 percent.

The dip came after more than 1 percent gains on benchmarks in Hong Kong and on the mainland in the last session.

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