MSCI is due to announce whether Shanghai and Shenzhen-listed stocks, or A-shares, will be added to its Emerging Markets Index on Wednesday, a decision that could see billions in foreign inflows flow to the world’s second largest equity market. It comes one year after the U.S. analytics firm told Beijing further liberalization was needed before acceptance, pointing to factors such as the country’s investment quota system that doesn’t provide equal access to all money managers.
Despite ongoing volatility, characterized by wild swings in the yuan, suspected intervention by state-backed funds and fears about economic growth, top officials believe MSCI will give the green light. However, it’s not a done deal. There’s a lot of bad dept in Chinese corporations and it is said that this may the biggest issue for MSCI.
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