(China Alert) The MSCI decision: Why it may not matter
-Managers awaiting an announcement are already being left behind
-Product level and service provider decisions haven’t been fully considered
-China is moving towards a restriction-light inbound access landscape
Update: The fanfare over MSCI’s decision on A-share inclusion is building up ahead of the June 14 announcement; speculation (and arbitrary probabilities) remains rampant. Z-Ben Advisors wants to take a different route and reiterate our long-held belief on MSCI’s announcement: It may no longer actually matter. The conversation now needs to move forward and focus on navigating what will be a restriction-light access landscape. The final dominoes are now falling in what is a redrawing of China’s investment channels. The onshore bond market is now open, the Connect could be expanded as early as this week and the world’s largest asset managers are now pushing newly introduced R/QFII access provisions to their limits. At the same time, Z-Ben Advisors believes there is a disconnect between the “if” and “when” on inclusion among the broader global investment community. No one should be waiting for MSCI’s announcement, whether inclusion is in two weeks or three years, to move on China.
BlackRock’s remarkably timed RQFII quota award of RMB20bn in Singapore announced yesterday, following Vanguard’s RMB30bn quota, highlights…
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