Interesting article was posted in the WSJ today here
The key take away:
MSCI’s discussions with several Chinese asset managers were abruptly curtailed in 2015 and 2016 after the firm didn’t add Chinese-listed stocks to the emerging-markets index following its midyear reviews, according to people close to or directly involved in the discussions. The Chinese firms communicated that they had been instructed by authorities to cut off negotiations with MSCI, the people said.
China’s two national stock exchanges also threatened to withdraw MSCI’s access to market pricing data, which the company provided to its customers all over the world, the people added. It was akin to “business blackmail,” said a person familiar with MSCI’s negotiations with Chinese regulatory authorities.
What I find more surprising here is China effectively forced their way onto an index. While one take away from this article is of course, China strong armed an index to add itself onto it for billions in foreign revenue. The other issue I see it casts doubt on the integrity of indexes. You assume these indexes are constructed in good faith based on established criteria and other factors, but it appears this is not the case.
Submitted February 03, 2019 at 06:03PM by John_Crichton http://bit.ly/2WDdzYO
