FTSE Russell announced Thursday that China A shares will not yet be included as a secondary emerging market, one of the results of its annual country classification review, a news release said.
The annual review is a formal process to determine country classifications within its FTSE Global Equity index: developed, advanced emerging, secondary emerging and frontier. The indexing firm introduced the FTSE Global China A Inclusion indexes in May 2015 in preparation for those shares eventually being included in the FTSE global benchmarks.
As part of the review, FTSE Russell determined China A shares will remain on FTSE's watchlist for potential inclusion at a later date.
“China is making very good progress toward opening its domestic A-share market to foreign investors, but our market consultations show continuing concerns around restrictive capital controls, high levels of stock suspensions and market interventions,” said Mark Makepeace, FTSE Russell CEO, in the news release. “We expect to see growing use of our FTSE Global China A Inclusion indexes prior to China A shares entering our core global benchmarks.”
FTSE Russell also announced that it is considering including Argentina, currently unclassified, as a frontier market; reclassifying Nigeria, now a frontier market, as unclassified; and reclassifying Romania, now a frontier market, as a secondary emerging market.