ME NewsWire/Business Wire
GENEVA - Wednesday, June 11th 2014
MSCI Inc. (NYSE:MSCI), a leading provider of indexes and other investment decision support tools worldwide, announced today that China A-shares will not be included in the MSCI Emerging Markets Index as part of the 2014 Annual Market Classification Review, but will remain on the review list as part of the 2015 Annual Market Classification Review.
This decision is based on feedback highlighting remaining investability constraints linked to the QFII and RQFII quota systems received from international institutional investors in a consultation launched in March 2014 on a potential roadmap for inclusion of China A-shares in the MSCI China and MSCI Emerging Markets Indexes. Because of the significant size of the China A-shares market, the possibility of further regulatory reforms and other changes expected in the near term, such as implementation of the Shanghai/Hong Kong Stock Connect program, MSCI believes that it is important to continue to engage with the international investment community on the potential inclusion of the China A-shares in Emerging Markets as part of the 2015 Annual Market Classification Review.
To provide additional tools for international investors investing in the China A-share market, MSCI will introduce by June 27, 2014, the MSCI China A International Index as a standalone index constructed using the MSCI Global Investable Market Index methodology. This index and the associated regional and global combinations can be used as benchmarks by global investors with QFII and RQFII allocations to complement the already extensive series of MSCI China A Indexes.
“Many international investors are already investing in the China A-share market and the amount of quota granted has increased significantly over the past two years,” said Remy Briand, MSCI Managing Director and Head of Index Research. “So the A-share market is effectively opening as we speak. MSCI’s role is to reflect in its indexes the increasing opportunity set as it occurs. Feedback from investors through this consultation is that they are generally supportive of an inclusion into the index over time but the current quota is still too constraining to warrant an inclusion in the mainstream index right now. We will keep the China A-shares on the list for potential inclusion into Emerging Markets and closely monitor the development of various schemes, such as the Shanghai/Hong Kong Stock Connect program, as they are implemented and used by investors.”
MSCI also announced today that the MSCI Korea and MSCI Taiwan indexes will be removed from the review list of country indexes proposed for potential reclassification to Developed Markets. This decision is motivated by the absence of any significant improvements in key areas negatively affecting accessibility in the Korean and Taiwanese equity markets for the past few years. Both indexes may be added back to the review list as soon as there will be meaningful improvements.
MSCI continues to closely monitor the ongoing tensions between Ukraine and Russia. In the case of a potential material deterioration of the situation resulting in restrictions on the accessibility of the Russian and/or Ukrainian equity markets due to introduction of restrictive measures, such as third party economic sanctions or capital or foreign exchange controls, MSCI may launch a public consultation on the treatment of the MSCI Russia and/or MSCI Ukraine Indexes in the MSCI Global Investable Market Indexes.
Following the substantial increase in Egyptian foreign currency reserves, MSCI also announced that it is no longer considering launching a public consultation on a potential exclusion of the MSCI Egypt Index from the MSCI Emerging Markets Index.
Finally, MSCI also released today the 2014 Global Market Accessibility Review for the 82 markets it covers. The classification of markets is a key part of the process of index construction because it drives the composition of the investment opportunity sets to be represented. The approach used by MSCI aims to reflect the views and practices of the international investment community by striking a balance between a country’s development and the accessibility of its market while preserving index stability.
MSCI conducts an annual review of all countries included in the MSCI indexes to ensure that they continue to reflect the standards of the underlying market classification. Results of annual reviews are announced each June.
A more detailed version of this announcement has been posted on MSCI’s web site at http://www.msci.com/resources/pressreleases/.
After posting the review announcement, MSCI will hold two press conference calls in English, hosted by Remy Briand, Managing Director, Global Head of Index and ESG Research, to answer questions from the media. Note that these press conference calls are restricted to journalists.
First Conference Call
Date: Tuesday, June 10, 2014
Time: 11.30pm CEST/10.30pm BST/5.30pm EDT/1.30am GST
Toll Free Numbers:
Hong Kong: 800‐900‐592
China A: 10800-712-1320
China B: 10800-120-1320
S. Korea: 00798‐14800‐6732
Participant passcode: MSCI
Second Conference Call
Date: Wednesday, June 11, 2014
Time: 9.00am CEST/8.00am BST/3.00am EDT/11.00am GST
Toll Free Numbers:
Hong Kong: 800‐900‐592
China A: 10800-712-1320
China B: 10800-120-1320
S. Korea: 00798‐14800‐6732
Participant passcode: MSCI
MSCI Inc. is a leading provider of investment decision support tools to investors globally, including asset managers, banks, hedge funds and pension funds. MSCI products and services include indexes, portfolio risk and performance analytics, and ESG data and research.
The company’s flagship product offerings are: the MSCI indexes with approximately USD 8 trillion estimated to be benchmarked to them on a worldwide basis1; Barra multi-asset class factor models, portfolio risk and performance analytics; RiskMetrics multi-asset class market and credit risk analytics; IPD real estate information, indexes and analytics; MSCI ESG (environmental, social and governance) Research screening, analysis and ratings; and FEA valuation models and risk management software for the energy and commodities markets. MSCI is headquartered in New York, with research and commercial offices around the world.
1As of September 30, 2013, as reported on January 31, 2014, by eVestment, Lipper and Bloomberg
For further information on MSCI, please visit our web site at www.msci.com
This document and all of the information contained in it, including without limitation all text, data, graphs, charts (collectively, the “Information”) is the property of MSCI Inc. or its subsidiaries (collectively, “MSCI”), or MSCI’s licensors, direct or indirect suppliers or any third party involved in making or compiling any Information (collectively, with MSCI, the “Information Providers”) and is provided for informational purposes only. The Information may not be modified, reverse-engineered, reproduced or redisseminated in whole or in part without prior written permission from MSCI.
The Information may not be used to create derivative works or to verify or correct other data or information. For example (but without limitation), the Information may not be used to create indexes, databases, risk models, analytics, software, or in connection with the issuing, offering, sponsoring, managing or marketing of any securities, portfolios, financial products or other investment vehicles utilizing or based on, linked to, tracking or otherwise derived from the Information or any other MSCI data, information, products or services.
The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. NONE OF THE INFORMATION PROVIDERS MAKES ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF), AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH INFORMATION PROVIDER EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF ORIGINALITY, ACCURACY, TIMELINESS, NON-INFRINGEMENT, COMPLETENESS, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE) WITH RESPECT TO ANY OF THE INFORMATION.
Without limiting any of the foregoing and to the maximum extent permitted by applicable law, in no event shall any Information Provider have any liability regarding any of the Information for any direct, indirect, special, punitive, consequential (including lost profits) or any other damages even if notified of the possibility of such damages. The foregoing shall not exclude or limit any liability that may not by applicable law be excluded or limited, including without limitation (as applicable), any liability for death or personal injury to the extent that such injury results from the negligence or willful default of itself, its servants, agents or sub-contractors.
Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results.
The Information should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. All Information is impersonal and not tailored to the needs of any person, entity or group of persons.
None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy.
It is not possible to invest directly in an index. Exposure to an asset class or trading strategy or other category represented by an index is only available through third party investable instruments (if any) based on that index. MSCI does not issue, sponsor, endorse, market, offer, review or otherwise express any opinion regarding any fund, ETF, derivative or other security, investment, financial product or trading strategy that is based on, linked to or seeks to provide an investment return related to the performance of any MSCI index (collectively, “Index Linked Investments”). MSCI makes no assurance that any Index Linked Investments will accurately track index performance or provide positive investment returns. MSCI Inc. is not an investment adviser or fiduciary and MSCI makes no representation regarding the advisability of investing in any Index Linked Investments.
Index returns do not represent the results of actual trading of investible assets/securities. MSCI maintains and calculates indices, but does not manage actual assets. Index returns do not reflect payment of any sales charges or fees an investor may pay to purchase the securities underlying the index or Index Linked Investments. The imposition of these fees and charges would cause the performance of an Index Linked Investment to be different than the MSCI index performance.
The Information may contain back tested data. Back-tested performance is not actual performance, but is hypothetical. There are frequently material differences between back tested performance results and actual results subsequently achieved by any investment strategy.
Constituents of MSCI equity indexes are listed companies, which are included in or excluded from the indexes according to the application of the relevant index methodologies. Accordingly, constituents in MSCI equity indexes may include MSCI Inc., clients of MSCI or suppliers to MSCI. Inclusion of a security within an MSCI index is not a recommendation by MSCI to buy, sell, or hold such security, nor is it considered to be investment advice.
Data and information produced by various affiliates of MSCI Inc., including MSCI ESG Research Inc. and Barra LLC, may be used in calculating certain MSCI equity indexes. More information can be found in the relevant standard equity index methodologies on www.msci.com.
MSCI receives compensation in connection with licensing its indices to third parties. MSCI Inc.’s revenue includes fees based on assets in investment products linked to MSCI equity indexes. Information can be found in MSCI’s company filings on the Investor Relations section of www.msci.com.
MSCI ESG Research Inc. is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc. Except with respect to any applicable products or services from MSCI ESG Research, neither MSCI nor any of its products or services recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities, financial products or instruments or trading strategies and neither MSCI nor any of its products or services is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Issuers mentioned or included in any MSCI ESG Research materials may include MSCI Inc., clients of MSCI or suppliers to MSCI, and may also purchase research or other products or services from MSCI ESG Research. MSCI ESG Research materials, including materials utilized in any MSCI ESG Indexes or other products, have not been submitted to, nor received approval from, the United States Securities and Exchange Commission or any other regulatory body.
Any use of or access to products, services or information of MSCI requires a license from MSCI. MSCI, Barra, RiskMetrics, IPD, FEA, InvestorForce, and other MSCI brands and product names are the trademarks, service marks, or registered trademarks of MSCI or its subsidiaries in the United States and other jurisdictions. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS)” is a service mark of MSCI and Standard & Poor’s.
MSCI, New York
Kristin Meza, + 1.212.804.5330
FTI Consulting, Hong Kong
James Jarman, +852.3768.4545/+852.9248.4739
Alvena So, +852.3768.4552/+852.9556.2587
MHP Communications, London
Nick Denton | Christian Pickel, + 44.20.3128.8754/8208
MSCI Global Client Service:
EMEA Client Service: + 44.20.7618.2222
Americas Client Service: 1.888.588.4567 (toll free)/+ 1.212.804.3901
Asia Pacific Client Service: + 852.2844.9333