The inclusion of the yuan in the SDR basket may push Beijing to implement further forms in China, including advances in its capital account liberalization. For instance, China recently implemented the Shenzhen-Hong Kong Stock Connect program to expand lists of mainland-listed companies that foreign investors can access.
SEE MORE: Yuan Could Support China ETFs
Earlier this year, China A-shares, the stocks trading on mainland exchanges in Shanghai and Shenzhen were boosted by speculation index provider MSCI could add those stocks to its international indices, including the widely followed MSCI Emerging Markets Index.
MSCI opted against that inclusion, but that does not mean A-shares are off the index provider’s radar. The opposite is true as MSCI remains actively engaged in client discussions regarding what steps need to be taken for A-shares to become appropriate fits for MSCI benchmarks. More than $1.5 trillion in global assets are benchmarked to the MSCI Emerging Markets Index.
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Deutsche X-trackers Harvest CSI 300 China A-Shares Fund
