Will China finally turn respectable?

Index provider MSCI's admittance of China's domestic stockmarket into its emerging-market indices would be a small but symbolic move.

Index provider MSCI isabout to announce whetherit will admit China'sdomestic stockmarketto its emerging-marketindices. Entry would be "asmall but symbolic move",says Marion Dakers in TheSunday Telegraph.

TheMSCI isn't contemplatingputting the entire A-sharesmarket in its indices yet;for now, it is concentratingon 5% of it. China's overallweighting would therebyonly rise from 25.9% to27.3% in the EmergingMarkets index (Hong Kongand US Chinese companylistings already providesome access). Another$21bn or so of foreignmoney would then comeinto the country, accordingto Axa Investments.

Capital controls, ownershiprestrictions and theregulators' ham-fistedperformance amidlast summer's marketmeltdown all suggestthat the A-shares marketis still more of a localcasino than a fully fledgedinternational stockmarket.But the government hasbeen making an effort toderegulate and reduce interference. If MSCI givesChina a green light, itwould provide confirmationthat "this is an importantmarket that is graduallyliberalising", says UBS.

Zinc bucks the metals trend

Stockpiles in warehouses tracked by the London Metals Exchange have slid by 18% this year to a seven-year low. The global supply deficit is set to triple by 2017. Meanwhile, China's infrastructure spending is accelerating at its fastest pace since 2009, adds Goldman; Chinese infrastructure and property markets are key sources of demand. Zinc has further to go.

Recommended

Four of the best investment trusts for investing in emerging markets
Investment trusts

Four of the best investment trusts for investing in emerging markets

Investors need to tread very carefully in this risky sector. Here are the best ways to approach it
22 Mar 2021
Storm brews in emerging markets as investors pull cash out
Emerging markets

Storm brews in emerging markets as investors pull cash out

Foreign investors have begun to pull cash out of emerging markets as they begin to look less attractive when compared to the rising return from holdin…
12 Mar 2021
Stockmarkets shrug off turbulence
Stockmarkets

Stockmarkets shrug off turbulence

Stockmarkets have hit their first bout of turbulence of the year, but most are clinging onto January’s gains.
4 Feb 2021
I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020

Most Popular

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?
Bitcoin

Central banks are rushing to build digital currencies. What are they, and what do they mean for you?

As bitcoin continues to soar in value, many of the world’s central banks are looking to emulate it by issuing their own digital currencies. But centra…
8 Apr 2021
House prices: from boom to even bigger boom
House prices

House prices: from boom to even bigger boom

UK house prices have risen to new to record highs, says Nicole Garcia Merida. Demand continues to outpace supply, but continued low interest rates, th…
9 Apr 2021
Nuclear power might never be popular – but now looks a good time to invest
Commodities

Nuclear power might never be popular – but now looks a good time to invest

Nuclear power gets a very bad press, but it is the ultimate renewable energy source. Interest in it is perking up again, says John Stepek. Which means…
9 Apr 2021