Shorting China Stocks From New York Could Get Easier
- Investors wanting to short currently face formidable hurdles
- Inclusion may increase amount of shares available to borrow
This article is for subscribers only.
Short selling could get a little bit easier in China after the country’s domestic stocks join MSCI Inc.’s big index club.
MSCI’s inclusion of onshore-listed Chinese shares next month will be a step toward increasing the pool of stock that’s available to borrow. Share lending in the country is virtually non-existent, compared to the U.S. or Europe where the practice often makes up about 20 percent of daily turnover. In just a few weeks, some $1.9 trillion of index-tracking money linked to MSCI is about to own equities in China for the first time.