(File Photo: VCG)

On June 1, China’s A shares was being included in MSCI’s (Morgan Stanley Capital International) benchmark index, and 226 A shares are expected to make their way into the MSCI index in two phases in the future, a move which shows the increasing openness of China’s stock markets.

MSCI is a world-famous independent provider of research-driven insights and tools for institutional investors. It publishes the MSCI BRIC, MSCI World and MSCI EAFE Index.

MSCI’s report on May 15 said the first phase began on June 1, making China’s A share value account for 1.26 percent of the MSCI China Index and 0.39 percent of the MSCI Emerging Markets Index. More A shares will be included in MSCI in the second phase in September.

The inclusion of the A-shares in the MSCI Index not only brings in overseas funds, but also has a strong demonstration effect on the investment style and investment philosophy, according to Teng Yin, the chief analyst at Everbright Securities.

For listed companies, the inclusion is a chance to show their positive image and of great significance to their international reputation and investment value.

“Expanding the degree of opening up by attracting international institutional investors in the Shanghai and Shenzhen stock markets is conducive to creating a quality investment atmosphere and promoting the establishment of a more open and fair stock market,” said Tian Lihui, a professor at the Institute of Finance and Development of Nankai University.

MSCI CEO Henry Fernandez said the decision to include China A-shares in the MSCI EM index was based on the success of the mainland's stock connect programs.

(Compiled by Zhang Jian)