investment viewpoints

China’s inclusion in the MSCI Index

China’s inclusion in the MSCI Index

Didier Rabattu, Head of Equities at Lombard Odier IM, comments on China’s inclusion in the MSCI index:

“The inclusion of the second largest economy domestic shares to MSCI indices has been considered for a while. There have been considerable challenges to the inclusion given the RMB’s convertibility and the inability of global investors to trade domestic shares previously. The latter issue has been largely resolved with the Shanghai and Shenzhen Connect.

“We note that the inclusion is small and will just be 0.7% of MSCI Global EM index in May 2018. This is more positive for the Chinese domestic market, as global investors are not significant market participants in the USD7 trillion Chinese domestic market.”

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