Global Head of Securities Services, Standard Chartered
There have never been more foreign investors investing in China as general optimism about the market has been boosted by the availability of clearer, simpler access channels.
Now in its third year, our annual RMB survey of investors, regulators and custodians across Asia, Europe and North America shows that investor confidence about China is at its most bullish since we launched the survey in 2016, with more than four in five (88%) of respondents now investing in China, up from more than three in five (67%) in 2016.
Connects accelerate China investment flows
Index inclusion drives market development
Meanwhile, the inclusion of China’s A-shares into the MSCI Emerging Markets Index and the proposed entry of onshore bonds into the Bloomberg Barclays Global Aggregate Index are spurring market enhancements, as regulators and markets act to meet the inclusion criteria. Our survey suggests that index inclusion is already impacting investor behaviour, with 44% of respondents investing before rebalancing.
However, there are still issues that China’s regulators need to address. At our recent roundtables with clients, it was clear that the number and variety of access schemes is starting to weigh financially and operationally on investors, custodians and regulators. Rather than welcoming further new schemes, such as the upcoming London-Shanghai Connect, the industry’s preference is for harmonization across the existing access channels.
But for most investors, it seems the decision about whether or not to invest in China is no longer a question of if, but how. If the country’s regulators can iron out the remaining roadblocks, a new era of Chinese investment could really take off.
Margaret Harwood-Jones, Global Head of Securities Services, Standard Chartered. Margaret is responsible for the strategic leadership of the securities services business globally, managing all the business unit functions including operations, technology, client management, business development and product management. She also leads the business agenda with financial institution clients on a worldwide basis, across cash management, securities services and trade finance.
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