FTSE Russell Said to Announce China A-Share Inclusion This Week

(Bloomberg) -- FTSE Russell plans to announce the inclusion of China A shares into its indexes on Thursday Beijing time, according to people familiar with the matter.

China has been informed by the U.K.-based index compiler of its decision, the people said, asking not to be named as they’re not authorized to talk to the media. They didn’t say when A shares will be included, or at what weighting. FTSE will hold a press conference co-organized with mainland bourses on Thursday, according to a spokesperson from the Shanghai Stock Exchange.

FTSE Russell Chief Executive Officer Mark Makepeace described the A-share market as "enormous" in an interview with Bloomberg Television on Sept. 14. The initial weighting of China’s stocks in FTSE indexes is likely to be more than 0.8 percent, he said.

Authorities in Beijing have long sought to have their equities more fully integrated into the global financial system. MSCI Inc. added more than 200 Chinese stocks to its benchmarks over two phases earlier this year, though their weighting remains low relative to the size of the mainland equity market.

Inflows from foreign investors after an FTSE inclusion would be a welcome prospect for stocks that have lost $2.4 trillion in value since a peak in January as a trade fight with the U.S. deepened. China’s equities would attract about $13.6 billion at a weighting of 0.8 percent, China Merchants Securities Co. analyst Zhang Xia wrote in a note dated Monday. Inclusion would provide some support for an A-share rebound, the note added.

FTSE will also announce a process for evaluating the inclusion of Chinese bonds in its indexes at the press event, the people said. The index compiler started preparation work on including Chinese bonds, Amy Wong, head of the firm’s business development in Greater China, said in May.

The China Securities Regulatory Commission didn’t immediately respond to a request for comment on Tuesday. Neither did FTSE’s office in Hong Kong, where it’s a public holiday.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net;April Ma in Beijing at ama112@bloomberg.net

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With assistance from Editorial Board