(China Alert) Bond index inclusion: Closer than you think

– Bloomberg has created transitional benchmarks for Chinese fixed income. – Broad bond index inclusion may now be more likely than MSCI’s A-share inclusion. Update: As the same old questions are starting to pop up about MSCI A-share inclusion this year, Z-Ben Advisors believes managers should also be looking at the other index decision: Chinese fixed […]
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(China Alert) WFOE PFMs: What everyone is asking

  • WFOE
-Regulations have only provided clarity on initial registration. -Global managers must consider a broad base of regulations and guidelines to discern what is feasible. Update: Now that global managers can enter the private fund industry in China, attention is turning to how to actually set up and raise money. While registration with the industry body […]
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(China Alert) Inbound channels hit by RMB internationalization pains

  • inbound channels
-Dwindling offshore RMB pools are increasing financing costs for inbound access channels. -The RMB’s drive towards internationalization is being hampered as a result. Update: Liquidity squeezes in the offshore RMB (CNH) market are becoming a greater concern for global asset managers. Greater funding costs (we’ve all seen the CNH-HIBOR spikes) and shrinking CNH pools in […]
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(China Alert) Competition to enter set to explode

  • FMC
– With 123 FMCs currently, there may be over 150 on the Mainland by 2020. – There is a bottleneck in approvals with many new FMC applications in the pipeline. Update: Last week, State Council committed to allowing majority-foreign-owned FMCs in China, with some as early as within the next 12 months. This week, we look at […]
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(China Alert) Broking new ground

-The State Council has committed to further opening the sector to global players. -We believe two foreign majority-owned brokerages will be approved in 2017. Update: Brokerages are often the less-talked-about middle child of financial joint ventures (JVs) onshore. This is about to change as the State Council’s directive on Tuesday applies to brokerages as much […]
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(China Alert) Market access: New marching orders

  • asset management industry
-State Council released a document on opening financial markets to global competition. -We expect access to China’s mutual fund market to begin this year with a pilot scheme. Update: China now has its marching orders to open the asset management industry further to foreign control. The State Council yesterday released a much-anticipated document giving its […]
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(China Alert) Private funds: What global managers can expect

  • private funds
-Private fund industry AUM had positive growth in every month throughout 2016 -Global managers will enter the industry in 2017 Update: This once niche area of China’s financial industry has been consistently gaining prominence and is now competing with larger and more-established firms to attract capital from both individuals and institutions. In addition to robust […]
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