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China's A-shares see foreign inflow spike amid global indices inclusion

BEIJING
2019-09-20 15:37

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BEIJING, Sept. 20 (Xinhua) -- Foreign capital inflow into China's A-shares market remains robust since the beginning of September after major global benchmarks announced widened inclusion of A-shares.

Net foreign capital inflow reached 45.9 billion yuan (about 6.5 billion U.S. dollars) since the beginning of this month through stock connect schemes with the Shanghai and Shenzhen stock exchanges, according to a Friday report by the Economic Information Daily.

The figure accounts for about 27 percent of foreign capital inflow since 2019, which stood at 167.4 billion yuan.

The influx came after global index provider MSCI raised index weighting for Chinese A-shares from 10 percent to 15 percent, effective from Aug. 27.

Another benchmark FTSE Russell strengthened the A-shares' weighting in one of its indices from 5 percent to 15 percent, while the S&P Dow Jones Indices will weigh 1,099 A-shares at 25 percent in an upcoming inclusion.

The two moves to take effect on Sept. 23 are expected to generate 5.1 billion U.S. dollars worth of inflow into the A-shares, according to FTSE Russell estimates and analysis from China Merchants Securities.

Analysts believe the A-shares are at the outset of a hot streak of foreign capital influx with more to follow as the country further opens up its financial sector.

China's forex regulator scraped two investment quota restrictions for foreign institutional investors earlier this month to better facilitate participation in the financial markets.
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