The two events set to drive Chinese investment this year

China's global reach could widen if the MSCI China Emerging Markets index is opened up to domestic stocks and the IMF decides to include the renminbi in its special drawing rights currency basket this year. Nitesh Shah, associate director, research, at ETF Securities, analyses what the two events could mean for investors.

There are a number of events that could prove to be a catalyst for further capital market deepening in China this year. In June, MSCI will reconsider whether to include domestic Chinese equities into its emerging markets index. With approximately $1.5tn benchmarked to the MSCI China Emerging Markets index, even a small allocation of 0.5% to the China A-Share market in the broader index could drive $7.5bn into the market on the back of index replication by investors. As a point of reference, the MSCI United Arab Emirates index rose over 90% between the time MSCI announced UAE stocks wo...