What is MSCI China A-share Index? How is its index calculated?

Morgan Stanley launches Morgan Stanley Capital International China A-share index.

The index automatically includes the 25 stocks with the largest adjustment according to free circulation.

Morgan Stanley Capital International announced in Beijing on May 10 that it has officially launched the MSCI China A-share Index, and plans to open a sales and customer service representative office in Shanghai to support its expanding business in China. According to reports, the head of the company's Shanghai representative office once worked for HSBC Shanghai Company.

According to Xie Zhengyi, research director of Morgan Stanley Capital International Asia-Pacific Index, the index was specially developed by MSCIBarra for domestic investors in China after full consultation with customers. This index is the first A-share index that accurately reflects the industry structure behind China A-share market, covering a limited number of tradable and investable stocks.

He said that the index is a completely independent index, not a part of the MSCI international stock index series, which is mainly determined by the purpose of design. Because the restrictions and investment objectives faced by domestic investors are completely different from those of international stock investors, international investors do not have as many investment options as domestic investors in China A-share market. Based on the limitations and different investment objectives faced by domestic and international investors, the index is designed according to the needs of domestic investors.

In addition, for international investors, the index will effectively become a bridge connecting foreign investors to enter the China market in the near future and an effective way for international investors to invest in China A-share market.

Xie Zhengyi said that the main characteristics of MSCI China A-share index are: adopting a transparent and objective method to compile a representative, investable and low turnover index; Using the bottom-up compilation method of global industry classification standard, the 25 stocks with the largest free circulation adjustment are automatically included to reflect the super-large companies in the A-share market.

In addition, through the screening of scale and liquidity and the adjustment of index constituent stocks according to free circulation, the benchmark index can be invested; Moreover, the calculation methods of price index and dividend reinvestment index support a variety of performance evaluation; The index will also be reviewed annually and quarterly to ensure timely reflection of market changes and prevent excessive fluctuations of the index.

Xie Zhengyi also told reporters that all A-share stocks listed on the Shanghai and Shenzhen stock exchanges with a free floating market value of at least 654.38 billion yuan are eligible to be included in the Morgan Stanley Capital International China A-share Index. However, stocks that have been specially treated, treated or suspended from listing, stocks with a single shareholder controlling 50% or more of the tradable shares, stocks with a liquidity problem below 15%, and investment trusts, mutual funds and stock derivatives are excluded. These standards are mainly formulated to ensure that the index is investable.