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September 28, 2018

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Investors not lifted by global index plan

INVESTORS were not buoyed by news that more A-shares would be included in a global index, with the key Shanghai share index ending lower yesterday.

The Shanghai Composite Index lost 0.54 percent to close at 2,791.77 points.

FTSE Russell, the world’s second-largest index service provider, said it will add Chinese A-shares into its key indices from June 2019.

The inclusion will be implemented over three separate tranches — 20 percent in June 2019, 40 percent in September 2019 and 40 percent in March 2020, the UK-based index compiler said in a statement on its website yesterday.

Once the first phase is completed, Chinese A-shares are expected to constitute 5.5 percent of the total FTSE Emerging Index, representing initial net passive inflows of US$10 billion of assets under management. These shares are projected to have a weight of 0.57 percent within the FTSE Global All Cap Index, the statement said.

“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.”

On Wednesday, MSCI Inc said it was eying to raise the weightage of A-shares in its global indexes from next year.

Shanghai shares fell yesterday after the US Federal Reserve said on Wednesday that it would raise interest rates for the third time this year.

Tianjin 712 Communication & Broadcasting Co fell 9.07 percent and Will Semiconductor Co shed 8.01 percent.


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