Implementation will be carried out in two phases, with the weighting increasing by 7.5pc each during the May and August review process next year

MSCI is considering raising the weighting of Chinese stocks in its benchmark indexes four fold and adding small-cap companies for the first time.

The US-based index compiler will immediately start a consultation with global investors, and the inclusion factor of yuan-traded A shares may increase to 20 per cent from 5 per cent, MSCI said in a statement on Wednesday.

Implementation will be carried out in two phases, with the weighting increasing by 7.5 per cent each during the May and August review process next year. The final result of the consultation will be announced by the end of February.

"Investors had a very positive experience after a very successful initial China inclusion this year,"said Chin Ping Chia, head of research for Asia-Pacific at MSCI. "We feel that the stock connect channel is able to take on a much larger weight than what it does today. There are discussion points that we will be consulting investors. We listed possible accessibility alignments that are needed for China to continue to increasing weight."