MSCI raises the inclusion factor of A-shares three times

Global index provider MSCI has raised the inclusion factor of A-shares three times within the year and MSCI's move to further increase the weighting of Chinese A-shares in its equity indexes is expected to bring more funds into the mainland stock market.

MSCI raised the inclusion factor of all large-cap China A-shares in the MSCI indexes from 15 percent to 20 percent, and added mid-cap China A-shares into MSCI indexes with an inclusion factor of 20 percent, effective after market close on Nov 26.

Upon completion, there will be 244 large-cap and 228 mid-cap China A-shares, representing a weight of 12.1 percent and 4.1 percent in the MSCI China and MSCI Emerging Markets Indexes, respectively.

The move followed a decision in March that MSCI would increase the inclusion factor of A-shares to 20 percent in a three-step process in May, August and November, each time upping the representation of Chinese large-cap stocks by 5 percentage points.

The new weighting increase in the widely tracked indexes will draw another $35 billion to $40 billion of funds to the A-share market, according to the China International Capital Corporation.