Why the Chinese A-share market is a good hunting ground for investors

Significant discounts emerging

In March 2019, MSCI confirmed its plan to raise China A-shares’ inclusion factor in its global indices from 5% to 20%.

These are shares of domestic Chinese companies traded on the Shanghai or the Shenzhen stock exchanges as opposed to those listed in Hong Kong (H-shares). The process involved three phases of implementation, and since the beginning of November, China A-shares' weighting in the MSCI Emerging Markets index has risen from 0.7% to 3.3%. There is an element of inevitability to the increasing recognition of China's equity market in global indices. This is a market with almost 5,000 companies with a market capitalisation of $8.5trn, and that is only going to become more relevant over time. ...