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China A-shares will have an aggregate weight of 5.25 percent and 1.76 percent in the MSCI China and MSCI Emerging Markets Indexes respectively, effective on May 28. Considering the MSCI inclusion as well as the further opening-up of China financial market, more exciting changes in China's equity market are being expected this year, according to Hong Hao, chief strategist for Bank of Communications International.
For example, the index futures trading is liberating since 2015's episode. And some new financial instruments have been launched since last year, for example, oil futures in RMB, gold futures in RMB, Hong said.
China's A-share is undergoing further opening-up but accompanied by tightening supervisions, and Hong said that more market-oriented approaches would help make the balance between them.
The approach is to be more market-oriented. And also this year we are going to have new tech board. I think there are many more instruments this year, Hong forecast.
The new tech board is expected to provide a new option for initial public offerings (IPOs) of Chinese high-tech firms thanks to its relatively low threshold for listing. Some have discussed that the new tech board is test ground for many new rules that could potentially be rolled out to the wide market. Hong echoed the point of view.
On the new tech board, the qualified companies get to be listed without going through the sort of process that the regulator is trying to tell you how much you should sell for. Now it is all subject to the market. And also, trading rules have been changed. The 10 percent trading limit has been released as well, Hong explained.
Hong considered the move braver than ever, saying: It probably will prove itself to be the right choice. And then with success being head in this new tech board, probably new policies can be applied to other markets.
(CGTN)
