Amidst all the buzz about Trump Kim Summit and US vs Rest-of-World trade war, an important financial event is taking place, that is the inclusion of China A Shares into MSCI Emerging Market Index.
Let's understand some background first.
MSCI and Emerging Market Index
MSCI stands for Morgan Stanley Capital International. It compiles key indices that represent the targeted equity market according to themes, industries or geographical sectors. These indices are often used as benchmark to measure investment funds' performance.
One of the most popular MSCI indices is the MSCI Emerging Market (EM) Index that tracks equity performance from 23 emerging, rapidly growing economy, that includes Brazil, China, India, Indonesia, Russia, South Africa and others.
A Shares Absence from the EM Index
China, although as the world's second largest economy and boasting the second largest equity market, its A shares (stocks listed domestically on the Shanghai and Shenzhen bourses traded ......