Investment Research Firm Encourages Global Investors to Invest in Chinese Stocks

A company that compiles a few of the world’s most closely monitored share indexes said investors all over the world should begin to pay more attention to China’s highly volatile stock market.

MSCI, whose indexes holds trillions of dollars of investments recently said this year it would increase the number of Chinese stocks in its key benchmarks four times. According to JPMorgan analysts, the company’s decision could draw an additional $85 billion into China’s stock market, which is currently the second biggest in the world behind the U.S.

While many analysts and investors embraced the move, saying it might raise confidence in Chinese stocks and spur companies in the country to boost their transparency, they also caution anyone tempted by the firm’s announcement to rush into China’s highly volatile and underdeveloped market.

Meanwhile, Kuwait is mulling over creating a $10 billion fund with China to invest in both countries, people with the knowledge of the report disclosed in an interview with the Business Times.

Authorities in the Middle East state are holding discussions on the establishment of a Kuwait-China Silk Road Fund which, according to the people, would invest in Kuwaiti projects linked to the Silk Road and developments in the islands. The nation will also use the fund for strategic investments in China and other countries under the Mainland’s “One Belt, One Road” initiative. China and Kuwait would raise around $5 billion each for the investment fund.

The Gulf state also aims to work with Chinese strategic partners to provide debt financing for projects, which could give the fund with an investment capacity of more or less $30 billion, the people who requested for anonymity said.