Index provider MSCI’s decision this month not to include mainland Chinese A-shares in its global indices was widely unexpected by analysts. Yet investors largely consider greater access to China merely a matter of time given the country’s growing economic clout and the size of its market.
“It’s not a matter of if but when,” says Mark Valadao, head of portfolio strategists for Asia ex-Japan at State Street Global Advisors. “Despite MSCI’s decision, China A-shares should still be on the table as an opportunity set as global investors prepare for its inevitable inclusion into MSCI.”
MSCI said the reasons behind its decision were chiefly technical, including a wariness over Chinese capital controls.