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On Wednesday, MSCI announced its intention to include Chinese A-shares (shares traded on the mainland) into its MSCI Emerging Market index.
Credit Suisse expects this to greatly benefit two Australian companies: Macquarie Group, long active in the Asian region, and Computershare, which is a registry provider to many Chinese stocks.
But overall, the implications for Australian shares were negative, as the market's centre of gravity (as determined by the market capitalisation of various equity markets) shifted north and away from Australia.
"Under our current assumptions, we expect China and Hong Kong will make up half of the Asia ex-Japan equity benchmark by 2030. This is from 20 per cent now," Mr Tevfik wrote.
"To accommodate the new giant in our neighbourhood, Australia's weight in the region will fall from 12 per cent to 6 per cent.
"As the boffins at the index providers raise the weight of China (and by default lower the weight of Australia), global passive funds will be obliged to slavishly follow their masters. They will be net sellers of Australia and net buyers of China."