FTSE Russell unveils transitional indexes that include China A shares

FTSE Russell, one of the world's largest index providers, will launch two transitional indexes that include China A shares - a step that paves the way for Chinese-listed shares to later be included in its emerging markets benchmark, the company's CEO said on Tuesday. The index provider said the two new emerging markets indexes will then merge with the standard FTSE emerging markets index when China shares meet the provider's criteria.
Inclusion in the global emerging markets index could lead to billions of dollars pouring into China's stock market over time. Global index providers FTSE Russell and MSCI International have both been weighing whether to include locally-listed China 'A' shares in their widely-tracked benchmarks following a slew of reforms that have helped to open up China's stock market. The November launch of Hong Kong-Shanghai Stock Connect scheme has given added impetus to their reviews but some of the world's biggest fund managers oppose the move due to investment constraints in China. "The inclusion of China A shares is the most significant challenge today facing global benchmark providers," Mark Makepeace, chief executive of FTSE Russell, the London Stock Exchange Group-owned index giant, told a news conference in Hong Kong.