(China Alert) The end of the China taboo

  • equity, Fixed Income
-We are seeing growth in demand for both China equity and fixed income products -Major global managers have launched physical China funds in the past three months to cater to this -BlackRock is taking action by moving towards better China exposure Update: MSCI may have delayed the inclusion of A-shares into its emerging market indices […]
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(China Alert) Your own China business: how will you react?

  • HNWI, WFOE
-CSRC has approved the first foreign majority-owned FMC -Chinese mutual funds are only one industry in which this change is occurring -Full foreign ownership will not be restricted to Hong Kong firms Update: Hang Seng’s majority-owned Chinese fund management company was approved last week. Z-Ben Advisors believes this is just the tip of the spear […]
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(China Alert) Navigating a billion $$$ unknown

  • FMC
-Z-Ben Advisors believes that foreign managers should expect large and, in some cases, recurring capital calls -This is a result of greater regulatory pressure on shadow banking -Risk management should be the focus of both regulators and FMC stakeholders Update: Z-Ben Advisors believes that FMC subsidiaries are on the verge of a major readjustment as […]
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(China Alert) Here come the Americans

  • market access, rmb
-The US is set to become a major player in RMB internationalization -Recent major reforms were the result of outcomes from last year’s S&ED -US managers and securities firms should now expect greater access and ownership onshore Update: Outcomes from the US-China Strategic and Economic Dialogue (S&ED) were released last night. Key developments cover two […]
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(China Alert) Chinese pensions: Show me the mandates!

  • NCSSF, pensions, SWF
-NCSSF has released its 2015 annual report showing stable funding and asset allocation trends -Mandates increased for both existing and new external managers -Pending reforms to the pension system will increase opportunity in the next 2-5 years Update: China’s state pension manager, the National Council for Social Security Fund (NCSSF), has released its 2015 annual […]
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(China Alert) The MSCI decision: Why it may not matter

  • MSCI
-Managers awaiting an announcement are already being left behind -Product level and service provider decisions haven’t been fully considered -China is moving towards a restriction-light inbound access landscape Update: The fanfare over MSCI’s decision on A-share inclusion is building up ahead of the June 14 announcement; speculation (and arbitrary probabilities) remains rampant. Z-Ben Advisors wants […]
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(China Alert) Hedge funds: A broad new horizon

  • Hedge funds
-The landscape for global hedge funds in China has changed over the past 12 months -The participant depth of the IM WFOE has increased significantly -We believe that global hedge funds should have access to several major sources of fundraising onshore Update: The approval of Bridgewater’s investment management (IM) WFOE has major implications for global […]
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(China Alert) CSRC pumps the brakes on FMC subs

  • CSRC, FMC
-CSRC is working on draft rules to tame FMC subsidiary growth -A limited grace period has been incorporated into the draft -We believe the final rules will be enforced shortly Update: CSRC’s FMC subsidiary draft rules have been reported. The regulator appears to be making a concerted move to tame loan and channel business being […]
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(China Alert) Bridgewater (quietly) defies the China critics

  • Bridgewater, WFOE
-The world’s largest hedge fund manager becomes the third investment management WFOE in China -The Shanghai-based platform was capitalized at nearly USD8m, well above the more typical level of capital -The expectation is for Bridgewater to move quickly and take full advantage of fixed income market reforms Update: With absolutely no fanfare, the world’s largest […]
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(China Alert) FMC profitability: Institutional demand boosts margins

  • FMC, mutual fund sector
-Strong institutional flows drive mutual fund profit growth -Product strategy is shifting to cater to this demand -Sticky AUM should lead to more stable dividend payments for foreign partners Update: The release of China’s mutual fund industry annual results paints a bright picture. Based on Z-Ben Advisors’ calculations, profit margins averaged 28.9% in 2015, up […]
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