Article / 31 May 2016 at 10:21 GMT

China stocks leap on MSCI inclusion speculation

Saxo Capital Markets China
  • SHCOMP jumps 3.34%, Growth Enterprise Market Index 4.92%
  • Both indices up in heavy volumes, driven by increased overseas buying
  • Goldman sees increased chances of China A shares' inclusion in MSCI index
  • China shares also gain on talk that Shenzhen-HK link-up will be launched soon
Shenzhen stock exchange
 Chinese stocks outperformed on increased likelihood that mainland-China shares 
will be included in the MSCI index. Photo: iStock

By Jay Luo

Chinese stocks surged on Tuesday in heavy volume on expectations that mainland-listed stocks, known as "China A shares", will be included in MSCI’s Emerging Markets Index this June and also a rumour that the Shenzhen and Hong Kong Stocks Connection will be launched soon.

The benchmark Shanghai Composite Index surged 3.34% to 2,916.62 points, its biggest one-day gain since March 2. The Growth Enterprise Market Index, consisting of growth stocks, leapt 4.92% to 2,159.80. Both indices broke their downward trendline since early April in heavy volume and filled the price gap left on May 9.

Shanghai Composite Index, daily chart
Shanghai Composite Index, Daily

Source: EastMoney

A Goldman Sachs report released this morning said the likelihood of China A shares’ inclusion in the MSCI index has risen to 70% from 50%.

Capital inflow data showed overseas investors net bought more than 3.4 billion yuan of A shares on Tuesday via the Shanghai-Hong Kong stocks connection channel, the biggest one-day net inflow in four months. Net capital inflow via this channel amounted to 8 billion yuan in the past five trading days, a sign of overseas fund managers’ rising interest in A shares.

Growth Enterprise Market Index, daily chart
Growth Enterprise Market Index, Daily
Source: EastMoney

— Edited by John Acher

Jay Luo is an editor and analyst at Saxo Capital Markets in China


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail