On 27 September, 2018, FTSE Russell's 2018 China A-Shares Evaluation Results Press Conference and Seminar was held at the trading floor of the Shanghai Stock Exchange. In the morning, FTSE Russell announced that it would include A-shares into its Global Equity Index Series (“FTSE GEIS”) with the secondary emerging market status from June 2019.
Nearly 100 representatives from China Securities Regulatory Commission (“CSRC”), The People's Bank of China (“PBC”), FTSE Russell Group (“FTSE Russell”), Shanghai Stock Exchange (“SSE”), Shenzhen Stock Exchange (“SZSE”), China Securities Depository and Clearing Co., Ltd. (“CSDC”) and more than 60 domestic and foreign financial institutions attended the conference and witnessed another important moment for China's capital market to open to the outside world. Fang Xinghai, Vice Chairman of CSRC, Mark Makepeace, CEO of FTSE Russell, Jiang Feng, General Manager of SSE, Zhang Zhaoyi, Chief Risk Officer of SZSE, and Zou Lan, Deputy Director of the Marketing Department of PBC, delivered a speech respectively. Huang Hongyuan, Chairman of SSE, attended the event. FTSE Russell is the second global major equity index company to include China A-shares in its index series after MSCI.
Fang Xinghai said in his speech that the successful inclusion of A-shares into the FTSE GEIS is a matter of course and meets the expectations of all parties. It is another milestone in the process of internationalization of China's capital market, which is conducive to further introduction of long-term overseas funds, improvement of the A-shares investor structure and higher internationalization level and resource allocation efficiency of the A-shares market. Since the beginning of this year, the total amount of foreign capital inflows to A-shares has reached 230 billion yuan, which typically reflects that foreign investors are long-term bullish on China's generous economic foundation, stable operation and timely and substantial risk prevention and control, and is fully confident about the prospect of the rapid transformation of China's new and old kinetic energy, continuous improvement of quality and stable development of the capital market. Next, CSRC will continue to promote the opening up of the capital market around the main line of serving the real economy, improve the quality and international influence of China's capital market, and maintain the healthy and stable development of China's capital market.
Mark Makepeace said that FTSE Russell was the first international index supplier to provide benchmarks for the Chinese market 20 years ago, and the inclusion of China's A-shares reflects the rapid development of the Chinese economy, especially the stock market since the reform and opening up. Under the efforts of Chinese regulators and market institutions, the listing and information disclosure system of China's stock market has gradually improved and international investment channels have become increasingly abundant. FTSE Russell will continue to work closely with global investors to provide index benchmark and analysis solutions to facilitate investment in Chinese stocks and bonds.
Jiang Feng said that the inclusion of A-shares into FTSE GEIS reflects the positive expectation of the international investment community for China's economic development prospects and the steady development of the capital market. It is a vote of confidence in China's adherence to the opening up and deep integration into the global financial market. In recent years, under the background of China's accelerated construction of a new comprehensive opening pattern, SSE has continuously accelerated the pace of international development in accordance with the overall deployment of CSRC. At present, SSE has formulated the business plan for Shanghai-London Stock Connect, and is smoothly promoting the preparation of relevant business rules and business arrangement.
Zhang Zhaoyi said that under the unified leadership of CSRC, SZSE has initiatively adapted to the requirements of international development, actively responded to the needs of foreign investors and market concerns, extensively carried out global roadshows, spared no efforts to promote the construction of overseas investors' management system for listed companies, and continuously promoted the integration of systems and services with the international community. SZSE will take the inclusion of A-shares into FTSE GEIS as an opportunity to further explore the space for index business cooperation with FTSE Russell, continuously optimize the market investment environment, strive to improve its frontline supervision and risk prevention and control capabilities, and orderly promote the implementation of its international development strategy.
Zou Lan said that with the marketization of interest rates and the promotion of RMB internationalization, PBC has actively promoted the reform and opening up of the bond market with relevant departments, and made positive progress in the inclusion of Chinese bonds by major international index suppliers. Today, FTSE Russell announced that China will be included in the FTSE World Government Bond Index (“FTSE WGBI”), which reflects the recognition of the Chinese bond market by the international community. Next, PBC will continue to promote the opening up of China's financial market and provide a more friendly and convenient investment environment for foreign investors.
After the press conference, representatives from CLSA, Huaan Fund, Southern Dongying Fund, Vanguard, Legal and General Investment Management, UBS Securities and HSBC participated in the roundtable forum to discuss the hot topics like the impact of the inclusion of A-shares into the global index series, international investors’ channels for investing in the A-shares market and major considerations with the participants.
