MSCI Forgets Its Doubts About China
Good enough.
Photographer: Wang Zhao/AFPIn the culmination of a long-running saga, MSCI Inc. yesterday announced that it would include some Chinese stocks in its widely used benchmark indexes, starting next year. China has taken this as recognition of its growing economic and financial might. But the decision seemed to have almost nothing to do with the reality of China's financial markets.
For one thing, MSCI seems to be ignoring much of what it said in the past. In yesterday's announcement, it suggested that the recent expansion of a stock-connect program was one development that counted in China's favor. But the big stocks that will be included in the index primarily trade on the Shanghai-Hong Kong Stock Connect, which was launched in 2014. It was up and running when MSCI rejected China for inclusion in the indexes in 2015 and 2016. So it seems like an odd basis for inclusion now.