Nomura Holdings and JP Morgan Broking (Hong Kong) submitted their applications to establish new securities joint ventures in China on May 8 and May 10, respectively, according to Gao Li, a spokesperson at the China Securities Regulatory Commission (CSRC). The two companies will hold 51% majority stakes in the new companies .
Th e applications came after the CSRC finalised the rules for foreign firms to gain majority ownership in local securities companies, and followed China’s decision last November to lift the foreign ownership cap to 51% and to abolish it altogether after three years.
Jamie Dimon, JP Morgan’s CEO, told media in China this week that the bank is still aiming for 100% ownership in a local securities house.
UBS was the first foreign bank which tried to take advantage of the new rules. The Swiss giant made an application last week to increase its stake in UBS Securities, its onshore joint venture, from 24.99% to 51%.
Vanguard listed a new China-themed ETF in Hong Kong on Thursday, the asset manager said in a May 10 press release. The new ETF tracks the FTSE Total China Connect Index, which covers 1,058 Chinese stocks listed in onshore China, Hong Kong, Singapore and the US, according to the press release.
This extensive coverage allows investors to spread risks among various sectors in China, from financials to technology and consumer services, said Cyrus Mui, Vanguard’s head of product research for Asia.
“This diversification could help minimise return cyclicality and enhance investors’ returns relative to the amount of risk they take,” said Mui.
The ETF is available to investors in renminbi, dollar and Hong Kong dollar.
TAIFEX and S&P Dow Jones Indices have launched the first index that tracks RMB futures in Taiwan, the exchange and the index provider said in a May 7 press release. The indices track two renminbi futures traded on TAIFEX.
Tianyin Cheng, director of strategy and ESG indices at S&P Dow Jones Indices, said the launch will help investors better manage their RMB risk, whereas Chaoshun Yang, executive vice president at TAIFEX, said the new indices will meet the demand from investors in Taiwan for more innovative products.
The trade volume of Singapore Exchange’s own CNH futures rose above $1bn for 15 consecutive days for the first time in April, the bourse said in a monthly report. The average daily volume of the contract stood at $1.5bn, up from $1.1bn at the end of last year. The exchange has cleared over $115bn for the product since the start of the year, up 207% from the same period in 2017.
China’s FX reserves shrunk by $18bn or 0.57% to $3.12tr in April, a spokesperson at the State Administration of Foreign Exchange (Safe) said in a May 7 statement. Safe attributed the drop to a 2% rise in the dollar index and the fall in value of non-dollar denominated assets in the reserves.
Mizuho has signed an agreement with the Export-Import Bank of China to provide trade finance and project finance along the Belt and Road, including in the renminbi, the Japanese bank said in a May 10 press release. Working with the Chinese policy bank, Mizuho will also provide economic and business insights for companies seeking to expand in China or Belt and Road countries, said the press release.