As an index provider, FTSE has been carefully monitoring developments in the A-share market. While we did not announce any changes to the classification of A-shares in our latest annual Country Classification review on 24 Sept, A-shares remain on our Watch List where they have been since 2004 for potential inclusion as a Secondary Emerging market.
Samuel rightly notes that the impact of including A shares in global benchmarks will be significant, and FTSE has recently completed a study (http://www.ftse.com/Research_and_Publications/2013Downloads/FTSE_China_…) examining several hypothetical scenarios for A-share inclusion in global benchmarks. Using current data, if A-shares were included in global benchmarks without any quota restrictions or foreign ownership restrictions, the weight of China in the FTSE Emerging All Cap index could nearly double from 19% to nearly 38%. On a global basis, China would become the 4th largest equity market in the world. For this reason, it is important for index providers like FTSE to ensure investors globally understand the implications of A-share inclusion, and FTSE will continue a dialogue with market participants to manage the transition when A-shares pass the Country Classification criteria for inclusion. Please see http://www.ftse.com for terms of use (which shall operate to apply to the content of this blog).