BlackRock Supports Inclusion of China A-Shares in MSCI Benchmarks
April 19 2017 - 9:41PM
Dow Jones News
By Gregor Stuart Hunter
BlackRock, the world's biggest asset manager, said for the first
time it favors the inclusion of China's domestic shares in MSCI
Inc.'s global benchmarks.
MSCI, which runs indexes tracked by trillions of dollars of
global wealth, is consulting the market for the fourth straight
year on whether to add Chinese domestic equities, also known as
A-shares, to its flagship global benchmarks.
"BlackRock is supportive of China A-share inclusion in global
indices," said Sam Kim, head of BlackRock's trading and liquidity
strategies group for the Asia Pacific region.
"We have over a decade's experience managing A-share investments
for our clients and multiple ways to provide these exposures,
including onshore Chinese investment quota and the capacity to use
the Shanghai and Shenzhen stock connect programs."
China is the biggest stock market to be absent from MSCI's
global benchmarks. At present, only Chinese companies listed
overseas are included.
If A-shares are included, fund managers will be compelled to add
Chinese domestic shares to their portfolios or risk returns
deviating from their benchmarks. Every year since 2014, MSCI has
declined -- citing concerns from arbitrary stock suspensions to
unclear ownership laws.
A new consultation launched March 22 reined in the scope of the
inclusion sought this year, limiting the number of shares to be
included by two-thirds compared to its last consultation. It also
noted that Chinese officials have addressed many of the concerns
that deterred MSCI in the past.
Asset managers say that although some technical hurdles remain,
they are becoming more favorable toward the proposed inclusion.
MSCI declined to comment.
Write to Gregor Stuart Hunter at gregor.hunter@wsj.com
(END) Dow Jones Newswires
April 19, 2017 22:26 ET (02:26 GMT)
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