Chinese stocks hit an 18-month high following MSCI’s decision to include them in its global benchmark equity index for the first time, marking a milestone in Beijing’s efforts to draw international funds into the world’s second-largest market.
China’s equity and bond markets are the second and third-largest in the world, respectively, yet foreigners hold less than 2 per cent of each. Three previous proposals by MSCI to include mainland stocks were rebuffed by the index provider’s stakeholders — primarily large asset managers. Helen Wong, head of HSBC’s Greater China operations, called MSCI’s decision a “pivotal moment”. She added: “This is the start of a process through which Chinese equities will achieve a prominence in global investors’ portfolios that reflects the size and significance of China’s domestic stock market and its economy.”