From Larry Jeddeloh of TIS Group:
MSCI has been considering adding Chinese equities to their benchmark indexes for a long time, and just got done with another review [April 2016] wherein they decided to keep the A-shares out for now. But, how much longer will this go on? Six months? A year? The point is, they will need to include Chinese shares very soon if they wish to maintain any credibility. China worked hard to meet MSCI concerns. President Xi himself got involved. They agreed to curbs on random trading halts and vowed to make cross-border capital flows easier. MSCI still got held up on the market’s accessibility, but how much longer can global investment indexes ignore a $6 trillion market? MSCI is playing a political game, but investors will begin to ignore that benchmark if they don’t come around very soon. How much longer do European, Japanese, and U.S. equity allocations have before reality arrives?
An eventual tailwind for China & headwind for others… perhaps within the next few months.