Index provider MSCI increased its pressure on Chinese regulators to push through sensitive market access reforms on Wednesday, stating it will not include more Chinese stocks until its concerns over hedging and other problems are addressed, reported the Financial Times.
The inclusion of so-called A shares into MSCI’s flagship emerging markets index in 2018 was expected to bring in more than $100 billion in foreign investments this year. MSCI has gradually increased their weighting throughout 2019.
The company completed its final scheduled adjustment at the close of trading on Tuesday, with the weighting reaching 4% in the emerging markets index, an influential benchmark tracked by global investors managing about $1.9 trillion.
But MSCI drew a firm line on Wednesday on conditions for inclusion of more stocks. It said in a statement that it would not hold further consultations on increasing the weighting until regulators addressed a list of concerns, including access to hedging tools, and problems with China’s settlement cycle and holiday schedule.