Index provider FTSE Russell will incorporate mainland Chinese stocks in its global indices beginning June of next year, following efforts by the government to open the country’s markets to foreign investors.
In a statement on Thursday, FTSE Russell said that, after the inclusion of the A-shares, Chinese equities will make up around 0.57% of the FTSE Global All Cap Index, representing net passive inflows of up to $10 billion of assets under management.
For the index provider’s key emerging markets index, China-listed companies will constitute 5.5% of stocks.
“China will also be added to our Watch List for possible inclusion in FTSE’s global bond indexes,” said Mark Makepeace, CEO of FTSE Russell. “The Chinese authorities have continued to introduce reforms designed to open their market to international investors and have transformed their economy into the second largest in the world.”
Earlier this week, fellow index company MSCI said it was considering doubling its weighting of A-shares in its flagship emerging markets index by 2020.