New rules on trading halts clear way to join MSCI

The Shanghai and Shenzhen stock exchanges will publish new rules on trading halts as early as next week, the China Securities Journal reported, a move that would increase the chances of the country's stocks being included in the global MSCI trading indexes, widely used as benchmarks for foreign share portfolio performances.

The rules are aimed at curbing arbitrary trading halts by companies listed in China, known as A shares, and limiting the trading-halt period, the report said on Tuesday, citing an unidentified official at Shanghai Stock Exchange. Some public companies abuse the current system to announce merger and acquisition plans to push up stock prices and then say the deals fail, the report said.

"The rule change, if realized, is in part to clear the hurdles for the A share market's inclusion in the MSCI Indexes," said Gao Ting, Shanghai-based chief China strategist with UBS Securities Co.