(China Alert) Emerging markets: All the better with China

  • Emerging market, MSCI
– Index providers are offering optional A-share inclusion: it is now a competitive decision – Selling emerging market funds could be easier with direct China exposure – soon to be best practice Update: Stage one of A-share inclusion has already been completed by Vanguard for its USD59.9bn Emerging Markets Stock Index fund. We believe that it is […]
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(China Alert) Shadow banking whac-a-mole

  • shadow banking
– Regulators have released numerous regulations to curb shadow banking in recent months – Institutions are actively reallocating assets in response – FMCs are building out capabilities to meet institutional demand Update: The sprawling shadow banking industry is being pushed into a corner as restrictions grow. Regulators from all sides are forcing financial institutions to cut down on […]
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(China Alert) Good fortune and corporate actions

  • Asset Management
-Corporate actions at large FMCs are back in focus after a long lull -Fortune SG’s marks a trend that is likely to buck the exits of old -A wider variety of global and domestic firms are showing an interest in China asset management Update: An eventful summer for China asset management has been capped by […]
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(China Alert) RQFII reforms: The ball’s in your court

  • cross border, RQFII
-All inbound access to China is now quota-light -RQFII offers the greatest capital flexibility -This raises questions about Hong Kong’s quota cap Update: Inbound access is now as reformed as it is going to get for the time being. China announced changes to the RQFII program. This brings it in line with its dollar-denominated sibling, […]
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(China Alert) To compete requires perspective

  • WFOE
-One of the biggest names in the business has established an IM WFOE -This approval needs to be viewed as part of a grander mosaic Update: Life is what happens when you’re busy making plans. This is an appropriate sentiment when thinking over the current competitive landscape of global managers targeting China. Pretty much every […]
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(China Alert) Tracker fund: AUM on a golden platter

  • ETF
-The first mainland SOE tracker fund has been launched -This is a key development for China’s SOE reform -Further opportunities may be available to global managers Update: China Universal launched a new fund – the CSI Shanghai SOE ETF – that raised RMB15.2bn (USD2.3bn). To put this into perspective, it is the third largest ETF […]
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(China Alert) MRF: Right place at the right time

  • MRF
– July saw the largest fundraising for northbound MRF to date – JP Morgan has the lion’s share but has begun restricting subscriptions – Demand for offshore exposure is rampant; quota is far from abundant Update: Well, what do you know; MRF monthly net flows into global funds broke RMB1bn for the first time in […]
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(China Alert) Shenzhen Connect: Fashionably late

  • Stock Connect
-The Shenzhen-Hong Kong Connect is set to launch by the end of the year -Through the Connect, foreign investors can access the world’s second-largest equity market -A wider range of stocks is only the beginning with instrument expansion in the cards Update: After rampant speculation and prolonged silences, China’s securities regulator has now announced the […]
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(China Alert): FMC subsidiaries: From extreme to base case

-Official draft guidelines for subsidiaries are stricter than before -Regulators are making an example out of shadow banking -Foreign partners will almost certainly face even higher capital calls Update: The official draft guidelines for FMC subsidiaries have now been released. Although structurally similar to the earlier reported draft, the official version is stricter across the […]
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(China Alert) RMB credit: And so it begins

  • CIBM
– An updated list of confirmed CIBM participants and products includes foreign managers – These now have unrestricted access to China’s fixed income markets Update: The China interbank bond market (CIBM) access list – institutions and products that have opened a trading account – for July was released last night. There were six foreign investors: we […]
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