China market round-up: CSOP links global investors to onshore hedge funds, firms line up London Connect listings, Hong Kong posts record RMB clearing volumes
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China market round-up: CSOP links global investors to onshore hedge funds, firms line up London Connect listings, Hong Kong posts record RMB clearing volumes

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In this round up, CSOP Asset Management creates a new platform to facilitate global investors’ access to A-share alpha strategies, first participating firms in the London-Shanghai Connect emerge, and Hong Kong registers its highest volume of RMB clearing in August.

CSOP Asset Management has launched a trading platform for global investors targeting Chinese A-shares, specifically aimed at linking foreign investors to onshore hedge fund managers. The initiative, called CSOP Compass Platform, will help global investors connect with some 7,800 ‘sunshine managers’, as hedge funds are known in the Mainland.

CSOP is a Chinese asset manager and an early participant in the RMB qualified foreign institutional investor (RQFII) scheme. The firm noted it first connected global investors to three sunshine managers, which took the role of investment advisers, with a 2013 fund launch.  

"We screen, select, and monitor the quality China alpha managers by categorising the investment styles into locally defined growth, value, growth plus value classifications," said Wang Chen, a portfolio manager for the CSOP Compass Platform. "Meanwhile, we also streamline the investment process, ensure each step is transparent and secure, [and that] proper risk control and compliance measures are also in place.”

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The London-Shanghai Stock Connect scheme is set to launch by the year-end, allowing the cross-listing of depositary receipts in the two markets. Huatai Securities, a brokerage, and Bluestar Adisseo, a chemicals company, are set to be the first Chinese firms to take advantage of the new link, according to media reports.

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Cross-border settlement in RMB under the capital account in China recorded a 1.3% monthly growth to Rmb475.1bn ($69.9bn) in August, the highest level since June 2016, according to CEIC data. Renminbi clearing activities in Hong Kong were also on the rise, hitting Rmb22.9tr last month, beating the previous historical high of Rmb21.5tr set in August 2015.

CNH deposits in Taiwan picked up in August, rising 0.6% on a monthly basis to Rmb314.9bn. Hong Kong, which continues to hold the largest pool of CNH among all offshore hubs, had a monthly 3.9% uptick to Rmb607.5bn, the highest level since November 2016.

The increases came even though the CNH exchange rate against the dollar fell 0.6% in August, closing at 6.85 per dollar, and went as low as 6.90 at the close of August 13, according to Bloomberg data. 

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