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S&P Dow Jones Indices rejects China A-share benchmark inclusion

By NexChange
Asset Management

gloomy Shanghai China

S&P Dow Jones Indices continues to exclude Chinese A-shares from all of its standard global benchmark indices.

“The consensus is to take a wait-and-see approach as significant uncertainty remains around what the eventual landscape will be for foreign investors,” according to a press release

For now, international funds will have to benchmark against alternatives indexes such as the S&P Emerging BMI + China A, S&P Global BMI + China A, and S&P Total China BMI.

Despite already introducing measures to open up the China A-shares market, policy makers need to do more to reassure global investors. This includes improving the structure of qualified investor schemes, clarifying tax issues, resolving logistical problems caused by same-day settlement and reducing uncertainty about repatriating foreign exchange.

“Advancement continues, but the current market environment supports a cautious approach on potential benchmark inclusion,” noted S&P Dow Jones.

Photo: Stanley Young

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