Global index provider MSCI will consider including eligible equities on Shanghai’s new Star Market in the MSCI Global Investable Market Indexes, which seeks to cover all types of markets around the globe, as well as its China-related benchmarks next month.
MSCI will add Star Market shares in its MSCI China Index, China All Shares Index, MSCI China A Onshore Index if the equities meet the requirements set out by the MSCI Global Investable Market methodology, as well as by the stock connect programs between Shanghai and Hong Kong and Shenzhen-Hong Kong.
Shanghai Stock Exchange To Attract More Biotech Companies
The Shanghai Stock Exchange kicked off trading on the STAR market in July, aiming to offer easier ways for tech firms to get listed. So far more than 30 companies have gone public on the board.
Net inflows of foreign capital in China have risen significantly this year amid a marketwide opening-up. The direction is toward bigger inflows as MSCI is looking to quadruple the weighting of Chinese mainland shares in its global indexes this year. FTSE and S&P Dow Jones have announced their own China additions.
Expansion of A-share inclusion in MSCI
MSCI said in July it started assessing the potential inclusion of STAR Market stocks, shortly after the launch of the new high-tech board. China created the new trading venue as a testing ground for several major stock-market reform measures including a registration-based listing system that shortens the period and improves transparency for applicants compared with other markets in the country. A total of 33 companies, mainly high-tech focused, are trading on the new board.
Bourses in Shanghai, Shenzhen and Hong Kong also reached agreement in late July to push forward the inclusion of STAR Market stocks in the Stock Connect programs, which allow investors in Hong Kong and on the mainland to trade on each other’s markets. But it is unclear when the inclusion will start.
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