On September 27, the Press Conference and Seminar on FTSE Russell's 2018 China A-Shares Evaluation Results was held at the trading floor of the Shanghai Stock Exchange (SSE). In the morning, FTSE Russell announced that it would include the A shares in its FTSE Global Equity Index Series (FTSE GEIS) with the Secondary Emerging Market Status, starting from June 2019.
Officials from the China Securities Regulatory Commission (CSRC), the People's Bank of China (PBOC), FTSE Russell Group, the SSE, the Shenzhen Stock Exchange (SZSE) and China Securities Depository and Clearing Co., Ltd. (CSDC), and nearly 100 representatives of more than 60 financial institutions from home and abroad attended the conference and witnessed another important moment for the opening up of China's capital market. Delivering speeches at the event were Fang Xinghai, Vice Chairman of CSRC, Mark Makepeace, CEO of FTSE Russell, Jiang Feng, President of the SSE, Zhang Zhaoyi, Chief Risk Officer of the SZSE, and Zou Lan, Deputy Director of the Market Department of the PBOC. Huang Hongyuan, Chairman of the SSE, was also present at the event. FTSE Russell is the second world major equity index company to include China's A-Shares in its index system following the MSCI.
Fang said in his speech that as a matter of course and another milestone in the process of internationalization of China's capital market, the successful inclusion of the A-shares into the FTSE Russell index meets the expectations of all parties concerned, and will help introduce more long-term funds from abroad and enhance the structure of the A-share investors, and further improve the international level and resource allocation efficiency of the A-share market. Since the beginning of this year, the total amount of overseas capital inflows to A shares has reached RMB230 billion, which fully indicates the overseas investors' long-term optimism about China's economic advantages such as the solid foundation, the stable operation and the timely and effective risk prevention, and their full confidence in China's economic prospects such as the accelerated shift of the new and old driving forces, the continuously improved quality and the stable development of the capital market. Going forward, the CSRC will focus on the main line of serving the real economy, continue to advance the opening up of the capital market, improve the operation quality and international influence of China's capital market, and maintain its healthy and stable development.
Makepeace said that 20 years ago, FTSE Russell was the first international index supplier to provide benchmarks for the mainland China market, and the inclusion of China's A-shares reflects the rapid development of China's economy, especially the stock market since the reform and opening up. With the efforts of Chinese regulators and market institutions, China's stock market has seen the systems of listing and information disclosure gradually improved and the channels for international investment increasingly enriched. FTSE Russell will continue to work closely with the global investors to provide index benchmark and analytic solutions and facilitate their investment in Chinese stocks and bonds.
Jiang said that the inclusion of the A shares into the FTSE GEIS reflects the optimistic anticipation of the international investment community for China's economic development prospects and the steady development of the capital market, just as a vote of confidence in China's adherence to the opening up and in-depth integration into the global financial market. In recent years, against the background of China's accelerated construction of a new pattern of opening up in an all-round manner, the SSE has continuously sped up the pace of international development in accordance with the overall deployment of the CSRC. At present, the SSE has completed the business plan for the Shanghai-London Stock Connect, and relevant business rules and arrangements are also in the process of preparation in an orderly way.
Zhang said that under the unified leadership of the CSRC, the SZSE has always taken the initiative to meet the demand for international development, actively responded to the needs of overseas investors and the market concerns, extensively carried out global roadshows, vigorously advanced the development of the management system for overseas investors in listed companies, and continuously promoted the integration of systems and services with the international market. The SZSE will take the inclusion of the A shares into the FTSE GEIS as an opportunity, further explore the space for cooperation in the index business with FTSE Russell, continue to optimize the market and investment environment, strive to improve the capacity for the frontline regulation and risk prevention and control, and push forward the implementation of the SZSE's international development strategy in an orderly manner.
Zou said that with the interest rates more market-oriented and the RMB increasingly internationalized, the PBOC has worked with relevant departments to vigorously advance the reform and opening up of the bond market, and made encouraging progress in the inclusion of China's bonds by major international index providers. Today, FTSE Russell announced that China was added to its Watch List for the FTSE World Government Bond Index (WGBI), reflecting the recognition of the Chinese bond market by the international community. Going forward, the PBOC will continue to promote the opening up of China's financial market and provide a more friendly and convenient investment environment for overseas investors.
After the press conference, representatives from CLSA, HuaAn Funds, CSOP Funds, Vanguard Investment Management, Legal & General Investment Management, UBS Securities and HSBC participated in the roundtable forum to discuss with the attendees on the hot topics such as the impact of the inclusion of A shares into the global index, and the channels for international investors to invest in the A-share market and their main considerations.