China Stocks Enter MSCI As $6.9 Trillion Market Goes Global

Ted

FYI: (This is a follow-up to this morning's article.)

China’s domestic equities will join MSCI Inc.’s benchmark indexes, a landmark step in the nation’s integration with the global financial system.

The decision, announced by the New York-based index compiler on Tuesday, will give China’s $6.9 trillion stock market a bigger role in everything from exchange-traded funds to 401(k) retirement plans. It also advances President Xi Jinping’s ambitions to make the yuan a global currency.
Regards,
Ted
https://www.bloomberg.com//news/articles/2017-06-20/china-stocks-win-msci-entry-as-6-9-trillion-market-goes-global

jerry

This is a big deal and bad news for lots of markets including india,latin america and eastern europe as all will get a lower share of the index maarket and to the extent that managers will have to protect themselves if these stocks do well active managers will also reduce their investments I am not planning to reduce my emerging market investments in the next few months but certainly won't buy the dips

BobC

Historically these things take a bit of time to settle, but they always do. I can remember back "in the day" when emerging markets included all of Asia ex-Japan, and Latin America was more frontier than emerging, and Eastern Europe...why would anyone own THOSE countries? Now Korea is considered developed and is part of the MSCI EAFE and the FTSE Developed Markets Indexes, as is Hong Kong, Taiwan, and Singapore. My experience is that while there may be some initial reaction for stocks from other EM countries, overall the initial inclusion is a relatively small total value.