Stocks wait on MSCI China call, rand steadies after swoon

Stocks wait on MSCI China call, rand steadies after swoon

Stocks wait on MSCI China call, rand steadies after swoon

Nigeria's shares will remain in the frontier index until at least November 2017, when MSCI will again address the country's access to markets.

China's inclusion had been rejected for the past three years, amid worries about regulation and accessibility for global investors.

MSCI's decision to include China A shares in its index was largely priced into the Shanghai and Shenzhen markets, with both up 6.5 per cent in the past month, she said. The country's dominance has only increased recently with the addition of US -traded firms including Alibaba Group Holding Ltd.

Only 222 stocks are being included and, with a weighing of just 5 percent, they will account for only 0.73 percent of the Emerging Markets Index.

This is why, the A-shares' inclusion in the MSCI indices would increase their global recognition and temper the negative reputation of worthy mainland shares.

A decision to include China's A-share companies in the MSCI Emerging Market Index could finally happen later this year.

"Speculation on MSCI inclusion is boosting Chinese shares in the short term", said Ronald Wan, chief executive at Partners Capital International Hong Kong.

Lieblich said on the press call that the oil producing nation's highly anticipated Saudi Aramco initial public offering "will have absolutely no bearing on our decision to include the Saudi Arabia index into the EM index".

Reservations remain over pre-approvals and technical issues related to Stock Connect, including the timely execution of trades and settlement, as well as a segregated accounts model that remains out of line with worldwide standards. The reduction in suspension of stocks has also been quite important.

The CSI300 index was unchanged at 3,552.56 points at the end of the morning session, while the Shanghai Composite Index gained 0.1 per cent, to 3,146.25 points. It had left them out because of concerns over restricted access to China's equity markets. The Chinese practice such as halting trading when company news is released also discouraged major American investment indexes from jumping in. Even if yuan-denominated shares are added, they would be dwarfed by overseas-listed Chinese stocks, which have increasing sway over MSCI's developing-nation gauge. Restrictions on currency trading in 2015 prompted the review.

Watch for some weakness in the value of the Aussie dollar over time as well as investors sell local investment to redeploy funds into China to achieve index weighting. tracker or passive funds will be most notable. Not only is the market massive - the second-biggest worldwide after America's - it's also home to numerous companies most aligned with China's consumer and service industries, which are seen as key drivers of the $11 trillion economy's long-term expansion.

United States stocks declined overnight as investors dumped energy shares after crude-oil prices sank into bear-market territory amid growing concerns that an uptick in global production would derail Opec's efforts to reduce supply.

The most recent disappointment for the Chinese market came last June, despite high expectations at the time as MSCI announced it was working with Chinese regulators. "China's weighting in current indices under represents its impact on the global economy".

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