Home / Business / UPDATE 1-Delay of Shanghai-HK bond intrigue casts doubt on inclusion of …

UPDATE 1-Delay of Shanghai-HK bond intrigue casts doubt on inclusion of …

* Shanghai-HK intrigue does not have regulatory approval

* Concerns embody liquidity, taxation issues

* MSCI declined to embody “A” shares in June

(Adds some-more quotes, background)

By Pete Sweeney

SHANGHAI, Oct 27 (Reuters) – Global equity index provider
MSCI Inc pronounced it is doubtful to supplement shares of mainland
China listed companies to a rising markets index
if there was a substantial check in a launch of a pilot
scheme joining a Shanghai and Hong Kong batch markets.

“In a finish we have a calendar in this process,” MSCI Hong
Kong’s Managing Director Chin Ping Chia pronounced in an interview
with Reuters on Monday. “If zero happens by a finish of this
year, stretching to Jun of subsequent year, we can design that we
are not going to make any change.”

Chia pronounced a January-to-June date operation reflected a need
for MSCI to observe a operation of a commander and for investors
to have adequate time to get operationally prepared for a new

Industry insiders had speculated that a launch of the
programme, that would potentially make it most easier for
foreign collateral to pierce in and out of mainland batch markets,
would symbol a pivotal remodel that would concede MSCI to include
yuan-denominated “A” shares in a index.

However, Hong Kong regulators pronounced on Sunday that the
connecting commander programme would not launch this week as
originally approaching as it had not won regulatory

“If a programme is not launched, we are behind to square
one, looking during QFII and RQFII, and given we are uninformed off the
consultation we consider we flattering most know a perspective of our
investors,” Chia said.

Chia was referring to other competent institutional investor
(QFII) programmes that concede unfamiliar investors to buy shares in
mainland Chinese companies by account government companies
which are postulated investment quotas.

MSCI pronounced in Mar that it designed to embody China “A”
shares in a benchmark rising markets index as early as next
May, a pierce that would have ploughed billions into Chinese
stock markets as investment supports tracking a index adjusted
their land by shopping adult “A” shares.

But in Jun MSCI pronounced it had motionless not to do so due to
resistance from a customer base, who were endangered about the
risks presented by liquidity and regulations, in sold a
lack of clarity on how increase would be taxed.

China, a world’s largest rising market, is already the
biggest member of a MSCI rising marketplace index,
which is benchmarked by some-more than $1.3 trillion tellurian assets
under management.

China’s stream share of a index, however, is mostly
composed of shares listed abroad or denominated in foreign

Chia pronounced that even if a programme launched within that
time frame, MSCI would not automatically embody “A” shares,
given restrictions in a programme on what shares foreign
investors can buy, as good as share and taxation issues.

“It is an engaging programme though it has a limitations,
so we don’t wish to put too most weight on a launch,” he said.

But Lin Yong, arch executive officer during Haitong
International brokerage formed in Hong Kong, pronounced pro-democracy
protests in Hong Kong had done it too unsure for China to launch
the batch bond scheme.

“This kind of sourroundings is not suitable to hurl out new
policies and (the authorities) can’t take a risk doing so,”
he pronounced in a Reuters Summit interview.
On Monday by Wednesday, Reuters reporters will
interview some of a region’s heading business total and
decision makers on a operation of cross-border investment issues,
generating disdainful stories accessible initial to Thomson Reuters
clients. Get a latest updates by regulating a Eikon RSUM formula or
online at: www.reuters.com/summit/China14

(Editing by Eric Meijer)

Article source: http://www.reuters.com/article/2014/10/27/china-msci-idUSL4N0SM1KA20141027

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