MSCI excludes China A shares from global indices

[SINGAPORE] Equity index provider MSCI on Tuesday said that it will not include China's mainland-based A shares in its benchmark emerging markets index but that the shares will remain on review for 2015.

MSCI Inc's decision to exclude China's local shares from its global indices shows that the nation must reduce trading restrictions to lure international investors to the biggest emerging economy.

China's quota system for overseas money managers, which limits holdings to less than 3 per cent of the country's US$3.3 trillion market capitalisation, is the biggest hurdle for including mainland shares in global funds, MSCI said after a year-long consultation with investors.