A-shares in MSCI index: potential US$40b long-term fund inflow

Singapore

THE eventual full inclusion of China's A-shares on a key MSCI benchmark should draw in passive fund inflow of nearly US$40 billion, a recent Morgan Stanley analyst report showed.

But this will be a long-term play, with the fund inflows immediately following the inclusion to be small, the report said.

"In the near term, the passive fund flows into China A-shares triggered by MSCI inclusion announcement will be limited while its longer-term impact would be significant."

The comment comes as index provider MSCI announced last week it would delay including China-listed shares in one of its key benchmark indexes. The actual implementation should now ta…