MSCI: Changes in emerging market equity index awaited - BBH

MSCI is expected to make its announcement in early Wednesday in Asia about changes to its emerging market equity index and are keenly awaited by investors globally, according to the research team at BBH.  

Key Quotes

“The focus is mostly on whether China's A shares will be included. Other Chinese equities, such as H-shares that trade in Hong Kong and ADRs that trade in the US, are already included.  Ahead of the decision, Chinese shares slipped, as did the H-shares.”

“Three other elements of the MSCI decision are awaited.  Will Korea be upgraded into the development world equity index?  Will Saudi Arabia be included in the emerging market equity index?  Will Argentina?  Korea's Kospi edged fractionally lower today.  Saudi shares are also trading with a slight downside bias today.  Yesterday's Argentina's bourse advanced roughly 1.8%.”

“Overall, the MSCI Asia Pacific Index eked out a minor gain but extended the advance for a third session and five of the past six.  Of note, the Topix and Nikkei rose to their best levels since August 2015.  However, they gapped higher, following the NASDAQ's biggest jump since last November as the large-cap technology shares continued to recovery, and both settled on their lows.  If this is a "normal" gap, it should be filled in the near-term.”

 

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