Global index provider MSCI said on Thursday that mainland Chinese stocks, or A shares, will rise to a weight of 4.1% in the MSCI Emerging Market Index, up from 2.55% currently, as it implements the final step of the weight increase of Chinese shares in its widely-followed emerging markets benchmark .MSCIEF, reported Reuters.
MSCI will also add a list of Chinese mid-caps as planned, the index provider said in a statement following its November semi-annual index review.
Further weight increases for Chinese shares will depend on Chinese authorities addressing several common areas of concerns from institutional investors, such as the lack of effective hedging tools to manage China A share risks, Zhen Wei, MSCI’s Head of China Research, told Reuters last month.
The MSCI announcement comes as China is stepping up opening of its capital markets amid a 16-month trade war with the United States. Foreign holdings of Chinese stocks rose to a record high at the end of September.