Ease of access to China a priority for investors says Funds Europe survey
It is becoming easier for foreign investors to access the Chinese market, both through onshore and offshore channels, according to
Funds Europe’sChina Investor survey 2020 conducted in partnership with Standard Chartered.
This has been a prime factor driving respondents’ decisions to increase their investment flows into China. Some 69% highlight ease of access to onshore channels (the Qualified Foreign Investor, or ‘QFI’) and 63% highlight ease of access through offshore channels (such as Stock Connect and Bond Connect) as being key to driving their investment strategies in the Chinese market.
China further opens up domestic financial market for foreign investment China’s new QFI investment scheme is set to make it easier and more streamlined to gain access to its capital markets, providing a new set of opportunities for foreign investors.
Sponsored by China Construction Bank (CCB)
Aiming to boost foreign investor engagement with China’s domestic capital markets, China has announced a series of rules for the Qualified Foreign Institutional Investor (QFII) and RMB QFII (RQFII) programmes.
The QFII and RQFII have now been integrated into one Qualified Foreign Investor (QFI) scheme. China’s capital markets regulators released the new Measures and implementary provisions for QFI on 25 September, 2020. They have attracted a high number of global investors since these new rules came into effect on 1 November, 2020.
& Securities Services
Stuart Jones, the Hong Kong-based chairman of the Pan Asia Securities Lending Association (Pasla), said the newly added margin financing and securities lending business could prove to be important for investors.
“The trend is clear that investors are looking for more alternatives and diversified products under QFII that will enable them to gain additional yield,” he told
AsianInvestor.
Stewart Aldcroft, managing director at Citi Markets & Securities Services, agreed the new opportunities offer a small but notable potential for returns
“In lending stocks, for some cases, 1% to 2% could be added to the annual return for some market players. It might not be significant for those big players but prominent for smaller ones,” he said.
Global investors hungry for A-shares despite tensions
China s healthy economy and expanding equities market is drawing more eyes from across the world. Australian superannuation funds, in particular, are looking to invest more.
Appetite is rising for Chinese stocks
For the past two decades Chinese investors have been eager to sample the broadening array of morsels available in the country’s rapidly growing equity market. Now, more foreign asset owners are looking to join the feast, with some of Australia s superannuation funds leading the way, despite deteriorating relations between Beijing and Canberra.
In October, Border to Coast Pensions Partnership of the UK and Australia s State Super separately announced mandates to increase their Chinese equity exposure. The British fund said it would allocate up to £500 million from its £46 billion ($55.8 billion) asset pot to two managers to run its China equity fund from early 2021, appointing Hong Kong-based FountainCap Research &