Welcome to the party. The big news this week is the addition of just over 200 stocks listed in the Chinese “A share” market (the yuan-denominated domestic Chinese equity market) to the widely followed emerging markets index managed by MSCI which some $1.6 trillion of assets track. The decision comes after 3 denials over the past 4 years. Currently the index has over 27% allocated to China through securities traded on other exchanges such as Hong Kong. This addition of the local Chinese market will only be modest to start (approximately 0.7% of the MSCI Emerging Markets index) but is expected to funnel as much as $210 billion to China as index-trackers rebalance and could grow over time should the MSCI broaden their definition of qualifying securities. The basket of stocks added in this first step are those that are already available to most global investors through China’s Stock Connect program where the securities trade in Hong Kong and settled in Hong Kong dollars (mostly large state-owned enterprises). Therefore, beyond the signal effect of China’s incremental step of integration into global markets, the primary beneficiary may be the currency (offshore yuan) as the rebalancers create demand in order to settle trades in the new additions.