Global index provider MSCI late Tuesday stopped just short of including mainland Chinese stocks in the company’s global and emerging-market indices.

China bulls had hoped MSCI would make a major announcement today regarding the inclusion of the China A-shares. Such a revision in the indices was expected to encourage index-linked investment funds to pour their money into Chinese stocks, sending share prices higher in the current rally.

MSCI said in an announcement on its website that “it expects to include China A-shares in its global benchmarks after a few important remaining issues related to market accessibility have been resolved.”

MSCI says it’s forming a working group with the China Securities Regulatory Commission (CSRC) to resolve the issues.

“Substantial progress has been made toward the opening of the Chinese equity market to institutional investors,” Remy Briand, MSCI Managing Director and Global Head of Research said in a statement. “In our 2015 consultation, we learned that major
investors around the world are eager for further liberalization of the China A-shares market, especially with regard to the quota allocation process, capital mobility restrictions and beneficial ownership of investments.”

Briand continued, “Because MSCI’s client base is so large and diverse, we have a strong interest in ensuring that remaining issues are addressed in an orderly and transparent way. We are honored that the CSRC has recognized MSCI’s expertise regarding the requirements of international institutional investors. We look forward to a fruitful collaboration that will contribute to the further
opening of the China A-shares markets to international investors and the inclusion in the MSCI Emerging Markets Index.”

MSCI stated that it may announce the decision to include China A-shares in the MSCI Emerging Markets Index as soon as the issues it has outlined are resolved. This may happen outside the regular schedule of its annual Market Classification Review.

MSCI’s decision to hold back including China A-shares for the time being comes as other index providers appear to be shifting toward an embrace of China A-shares.

The Nikkei Asian Review said in a Tuesday morning story that index-linked investment funds worth an estimated 90 billion yuan ($14 billion) could flow into Chinese stocks if MSCI went through with the revision.

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