Bet Against MSCI Inclusion

I don't see A-shares being added to MSCI indexes because it is not a political decision like the SDR. China is less than 12 months removed from massive intervention in the markets, but MSCI indexes are tracked by many funds and ETFs. Competition for indexes is intense and there are enough problems as it is with ETF flash crashes. By other measures, such as valuation, now is a far better time than a year ago, though still not great. Whether included or not, the long-term direction of the market will not be altered and it remains in a bear market for now.

As for other opinions, they vary:

FINTS: MSCI inclusion to rekindle global interest in Chinese equities

WSJ: Analysts Skeptical MSCI Index Will Include China A-Shares
Reuters: Goldman Sachs raises odds of China share inclusion in MSCI indexes to 70 percent
Barron's: Goldman Sees Huge Buying Into China ADRs Upon Full MSCI Inclusion
Goldman Sachs estimates that Alibaba (BABA), Baidu (BIDU) and JD.com (JD) will represent 8.4%, 5.2% and 1.7% in MSCI China, and 2.2%, 1.4% and 0.5% in MSCI Emerging Markets.

We can expect to see a large amount of inflow upon the full MSCI inclusion. Assuming $1.5 trillion is tracking MSCI Emerging Markets, Goldman estimates the inclusion of the 2nd tranche could usher in $43 billion of net buying - 87% active and 13% passive – for 13 Chinese ADRs, taking an average 14.4 days of net buying at the stock level.

Apart from the three mentioned above, the other ten stocks are: NetEase (NTES), Ctrip.com (CTRP), Qihoo 360 (QIHU), New Oriental (EDU), Vipshop (VIPS), 58.com (WUBA), TAL Education (XRS), Qunar (QUNR), Soufun (SFUN) and YY (YY).

iFeng: 外资机构:纳入MSCI指数也救不了A股 还会继续下跌
"Even if China A-shares are included in the MSCI World benchmark index, the immediate effect will be very small, the possibility of a sustained rebound is unlikely," China economist Kay cast macro in London Chang Liu said in a report released Tuesday He wrote, "the Shanghai index is still higher than 2014 levels, that is, before the bubble began to swell up to 40%, all in the future there is still the possibility of further decline."

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