MSCI warns Chinese companies risk being dropped from EM index

MSCI's head of research for Asia Pacific, Chin Ping Chia, crossed the wires last minutes, via Reuters, issuing a warning to the Chinese companies that they could be dropped for suspending trading in their shares for too long.

Key Points:

China was an outlier in global markets with too many suspensions in stock trading

MSCI closely monitoring the 222 China-listed A-shares that will be added to its Emerging Markets Index next year

"If we find a company suspends for a long time, over 50 days, we will remove it from the index, and we will not bring it back to the index again for at least another 12 months"

12-month removal rule would be limited to Chinese companies

Companies from other markets who are removed from the index due to a long suspension of trading would be able to start a review process for reinclusion once they resumed trading