1099 A shares were included in BMI, accounting for 36% of China's market weight
A-share globalization will play a positive role in promoting both domestic and foreign investors, as well as the A-share market and selected listed companies.
1099 Chinese A shares were officially included in the S & P emerging market global benchmark index (s p emerging BMI), which took effect at the opening on September 23. Among the 1099 A shares, there are 147 large cap stocks, 251 medium cap stocks and 701 small cap stocks. After the 1099 A shares are included in the BMI index with a 25% Inclusion factor, it is expected that a shares will be in the S & P emerging market global benchmark index (s p emerging BMI) accounts for 6.2%, and it is estimated that the Chinese market (including a shares, Hong Kong shares and overseas listed Chinese stocks) accounts for 36% of the index.
On August 24, FTSE Russell announced that the inclusion factor of a shares would be increased from 5% to 15%. On August 27, the second expansion of MSCI officially took effect, and the inclusion factor of a shares increased from 10% to 15%. With the formal inclusion of a shares in BMI index, the three international indexes intensively increased the weight of a shares, which shows that they attach importance to the A-share market and are optimistic about its development potential.
Behind the three international indexes are many global investment institutions, which means that more incremental funds will begin to pay attention to the A-share market. Some institutions predict that the three can bring more than 200 billion yuan of incremental funds. The entry of a large amount of foreign capital will not only bring more long-term investment funds for A-shares, but also promote the globalization of A-shares. In addition, the connection of the three international indexes to A-shares The expansion and expansion also reflects the increasing influence of China's capital market in the world, and the investment value is further highlighted.
Since the beginning of this year, the new regulators have continued to promote the institutionalized reform of the A-share market and built a series of open measures that are more in line with international investment standards and further open the door to foreign investment. They have not only achieved remarkable results, but also let international investment institutions see that the inclusiveness and transparency of China's capital market are increasing, reflecting the rule of law and marketization in exchange for greater development space As evaluated by S & P Dow Jones index company, the reason why some A shares are included in its global index system is that China plays an increasingly important role in the global investment system. In the past few years, China has been committed to promoting the reform of market mechanism, especially expanding the market opening to foreign investors.
According to the data from Dongfang wealth, since the opening of the Shanghai Shenzhen Hong Kong stock connect, the net amount of funds entering the A-share market through the Shanghai Hong Kong stock connect and Shenzhen Hong Kong stock connect has reached 756.2 billion yuan. With the improvement of 1099 A shares included in the BMI index and the inclusion factors of a shares in the FTSE Russell and MSCI indexes, the proportion of foreign capital in the A-share market will also increase rapidly, and the influence on the direction of the A-share market is also increasing. The three major indexes Several capital flows show that international capital focuses more on investing in industries and enterprises with good long-term performance and high growth, such as banking, non bank finance, food and beverage, medicine, electronics, etc. at present, the A-share market is still at the stage of tamping the bottom of the price. It is a value 'depression' in the eyes of foreign capital, which will naturally be more favored and concerned by foreign capital.
From the perspective of investment style, foreign capital pays more attention to fundamental stock selection and centralized capital investment, and advocates the concept of value investment. Foreign investment in a shares will not only improve the share price of high performing listed companies, but also gradually affect the concept of domestic investors, and correct the bad atmosphere of "innovation" and "speculation in small cap stocks and loss making stocks" in the A-share market.
For A-share listed companies, being selected into the three international indexes also has many advantages. First, after entering the international market, it will directly improve the external image and brand influence of relevant A-share listed companies. Second, after entering the international market, they must accept the test of international market standards and improve the governance level of listed companies. For those whose performance has been 'modified' and there are various violations Once foreign capital finds out that the performance of a listed company is fake, it will be abandoned by investors without hesitation, causing the capital to "flee", resulting in a sharp decline in the market value. In fact, this is also a market-oriented means of forcing listed companies to eliminate the fittest based on real performance.
1099 A shares are included in the BMI index, which is a part of A-share globalization and a win-win move. It will play a positive role in promoting both domestic and foreign investors, as well as the A-share market and selected listed companies. Of course, with the continuous increase of foreign capital, the requirements for the supporting management system of the A-share market will be higher and higher and need to be improved. On the one hand , we should constantly improve the protection mechanism for investors' rights and interests and the convenience of capital access to compliance; on the other hand, we should prevent the random flow of hot money (including inflow and outflow) from causing systemic risks.