The Future of China's Stock Market

As they open their doors to foreign investors, Chinese capital markets are entering the next stage of their evolution - but what does the future hold?

Jackie Choy, CFA 19 July, 2018 | 2:36PM

The Chinese equity market has evolved significantly since launch on October 31, 1995 and will continue to do so. With the inclusion of China A-shares and possible future inclusion of mid-cap stocks, emerging-markets indexes will likely further increase their concentration in the Asia region, and China in particular.

Change is the only constant. Indexes are living, breathing creatures that evolve in sync with the economy and the markets. Nonetheless, some changes are "man-made" and, in the case of the MSCI China Index, one such series of changes is well-known, announced in June 2017, and recently became effective.

On June 1, 2018, MSCI added 234,227 China A-shares to the MSCI Emerging Markets Index in a two-step process, up from 222 as announced last year, owing to subsequent index reviews and stock suspension conditions.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Jackie Choy, CFA  is an ETF strategist at Morningstar, based in Hong Kong.

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