A number of international asset management institutions, including Hanling capital, CCB international, CDH investment and Jifu Asia, have recently joined the pilot of qualified overseas limited partner (qflp) and qualified domestic limited partner (qdlp). At the same time, a number of international asset management submitted applications for additional pilot quotas.
China's capital market has been steadily opening to the outside world. While a number of international asset management institutions have accelerated the pace of layout, northbound funds have also begun to gradually reverse the net sales trend since March. Industry insiders said that with the support of a number of factors such as the improvement of the macro environment and low valuation, international investors are expected to further increase their investment in RMB assets in the future.
international asset management institutions compete to enter the market
According to the disclosure of Shanghai local financial supervision bureau, four institutions, Hanling capital, CCB international, CDH investment and Jifu Asia (phase II), have applied to participate in the qflp pilot recently; BlackRock fund and Anzhong investment applied to participate in the qdlp pilot. At present, the pilot qualifications of six asset management institutions have been approved.
A number of international asset management institutions planned to increase their business in China and submitted applications for additional pilot quotas. Recently, three qdlp pilot institutions, Credit Suisse investment, pinhao investment and ruiruirui investment, were approved to increase the quota by US $200 million, US $200 million and US $100 million respectively, and the total approved quota reached US $400 million, US $400 million and US $150 million respectively; Hainahua and Xinjing investment two qflp pilot institutions added an investment quota of US $70 million and US $500 million respectively, and the total approved quota reached US $700 million and US $1 billion respectively. Tang Xiaodong, head of BlackRock China and chairman of BlackRock fund, said that he believed and was optimistic about the potential of the Chinese market for a long time. This layout of qdlp business is a good opportunity for BlackRock to further introduce overseas investment and risk management experience.
At the same time, since this year, the shareholding ratio of foreign shareholders of a number of foreign holding securities companies has also increased significantly. In March this year, UBS completed its shareholding increase in UBS Securities, a Chinese joint-venture securities firm, raising its shareholding ratio from 51% to 67%. In April, HSBC Bank of Hong Kong and Shanghai, a wholly-owned subsidiary of HSBC Holdings Limited, also announced that it had completed the transaction of increasing its 39% stake in HSBC Qianhai securities, a Sino Chinese joint venture securities company, and increased its shareholding from 51% to 90%. Credit Suisse has also increased its investment in China and has become the controlling shareholder of joint venture securities companies. Its long-term goal is to achieve a wholly-owned holding of Credit Suisse Securities.
northbound capital net purchase volume in a single day hit a new high in the year
On May 20, northbound funds made a substantial net purchase of 14.236 billion yuan, a new high of net purchase in the year. Among them, the net purchase of Shanghai Stock connect was 10.374 billion yuan and that of Shenzhen Stock connect was 3.862 billion yuan. The banking, basic chemical and public utilities sectors were the hot industries for "fund-raising" in the north on that day.
In terms of the year, the volatility of cross-border capital flows increased. Except for March, the other four months showed a net buying trend of northward funds as a whole. Up to now, the net purchase amount of northbound funds since May has been 5.533 billion yuan. However, due to the substantial sales of northbound funds in March, the net sales of northbound funds during the year were still 12.495 billion yuan.
Wang Jianjun, vice chairman of the CSRC, previously pointed out that from historical experience, it is normal for foreign capital to enter and leave, and there has been no fundamental change in foreign capital flows and transactions in the near future. Since this year, the net inflow of allocation and long-term funds has maintained, indicating that foreign capital is optimistic about the long-term investment value of a shares.
The data also show that the overall trend of foreign capital inflows into the Chinese market has not changed in the past five years. The data show that for six consecutive years from 2016 to 2021, northbound funds have maintained a net buying trend. Up to now, the net purchase amount of northbound funds has reached 1646490 million yuan.
"At present, China's economic fundamentals maintain a steady recovery trend, which can effectively support the resilience of the RMB exchange rate. The relatively low valuation level of the stock market, combined with the economic recovery of overseas economies, especially emerging markets, still faces great uncertainty, which will further attract international investors to increase their investment in RMB assets." Kang Yong, chief economist of KPMG China, said.
China's high-level opening of capital market is worth looking forward to
As a key area mentioned by regulators many times, China's capital market has been opening up in both directions. On May 20, the CSRC issued the measures for the supervision and administration of managers of publicly offered securities investment funds, which once again mentioned promoting the high-level opening-up of the public fund industry. The measures point out that we should adhere to the principle of consistency between domestic and foreign investment, further improve the access conditions for overseas shareholders, encourage learning from overseas advanced asset management experience and beneficial business models, and actively introduce high-quality overseas institutions.
At present, foreign institutions remain optimistic about the future trend of Chinese assets and are expected to further expand their business in China in the future. Standard Chartered Bank recently released a report saying that due to policy support and relatively low valuation, Standard Chartered still believes that Chinese stocks may outperform global stocks in the long run. Huang Jian, vice president of JPMorgan global banking Co., Ltd., said that with the further opening of China's financial market, JPMorgan global banking Co., Ltd. is expected to achieve a win-win situation in the future.
In the future, more practical measures to expand the development of financial markets will also be launched. The CSRC said recently that it will launch more practical measures to expand opening-up in the future, including optimizing and expanding the interconnection of domestic and foreign capital markets, broadening the subject scope of Shanghai Hong Kong stock connect and Shenzhen Hong Kong stock connect, and expanding and optimizing the Shanghai London Stock connect mechanism; Enrich the supply of products for cross-border investment and risk management, and steadily expand the international varieties of commodities and financial futures; Strengthen the construction of regulatory capacity under open conditions, deepen cooperation with overseas regulatory authorities, strengthen communication with international investors, and build a good and predictable international environment for the high-level opening of China's capital market.
