China stocks take step forward with MSCI nod

The decision last year by MSCI to add more than 200 firms was seen as a victory for Beijing, which has pushed for years to have its equities recognised, as leaders look expand the country's global market influence.

China stocks take step forward with MSCI nod

World Bulletin / News Desk

Equities index compiler MSCI will on Friday include mainland China-listed companies on its benchmark indices, giving many foreign investors their first exposure to Chinese shares.

The MSCI indices track constituent companies' performances, which are then used as a guide for cash-rich foreign institutional investors (FIIs).

Following are answers to key questions on what this mean for China and foreign investors.

Why did it take so long?

US-based MSCI has for years resisted adding China-listed stocks -- or "A-shares".

Concerns included Chinese government meddling in business, murky corporate governance, and difficulties foreign institutions faced buying shares in China's walled-off markets.

Then there's the volatility caused by the millions of unsophisticated small investors who drive most trading with often bizarre "buy" decisions, such as a surge in companies whose names resembled North Korean leader Kim Jong Un's when he visited Beijing in March.

Güncelleme Tarihi: 31 Mayıs 2018, 10:57