The MSCI announced that it will raise the inclusion factor of all large-cap China A-shares in the MSCI indexes from the current 10% to 15%, effective after market close on Aug. 27, reported Xinhua.
Hiking the inclusion factor by 5% is likely to lead to around $22.7 billion of incremental capital to the market, according to estimates from China International Capital Corporation Limited. The inclusion will bring the weighting of China A-shares in the MSCI China index and MSCI emerging market index to 7.79% and 2.46%, respectively.
The move followed a decision in March that it will increase the inclusion factor of A-shares to 20% in a three-step process in May, August and November, each time upping the representation of Chinese large-cap stocks by 5%.
The MSCI also decided to take China’s science and technology innovation board into consideration and provide a further eligibility assessment before the semi-annual index review in November.