MSCI accepts China A-shares

After three years of rejection, MSCI has finally accepted China A-shares into its bellwether emerging markets index.

http://www.reuters.com/article/us-msci-indexes-idUSKBN19B325?il=0

The move will be gradual, however, and broader demand for A-shares seems already priced in. We note that the best rallies in A-shares have started with much lower premiums to H-shares. (The bottom panel below is a proxy for such premium, which is directly observable here.)

Conclusions? China A-shares will play an increasingly important role in global markets. But we don’t detect a classic asset-allocation opportunity at this time.

By | 2017-06-21T10:25:10+00:00 June 21st, 2017|Categories: Market Strategy Report|0 Comments

About the Author:

Mark Ungewitter is a Senior Vice President & Investment Officer at Charter Trust Company. He was formerly Director of Portfolio Management at Investors Bank and Trust in Boston, Massachusetts. He holds an M.S. from Bentley University and a B.S. from Massachusetts College of Liberal Arts. He is a member of the American Association of Professional Technical Analysts.

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