Many fund managers and investors may have to buy shares that are included in major indexes that include A-shares as their funds and portfolios often track the benchmark, Wan said.
“My expectation is that the capital inflow into (the) Chinese market will be increasing,” he said.
The potential for increased A-share weighting has “sparked aggressive equity inflow” into Chinese markets through Hong Kong ahead of MSCI’s decision later this month, Ken Cheung, senior Asian foreign exchange strategist at Japanese bank Mizuho in Hong Kong, said in a Wednesday note.
The inclusion of Chinese bonds in the Bloomberg Barclays Global Aggregate Index is also significant, said Ken Peng, head of Asia Investment Strategy at Citi Private Bank in Hong Kong.
Chinese bonds will now make up 6 percent of that index, from 0 percent before.
“That is massive,” Peng told CNBC on Thursday. “It’s going to go from zero to the No. 4 bond market in the index.”