The rise of China's capital markets
Has a country’s financial and capital market ever transformed as quickly as China’s has in the last year or so? From the launch of the Bond Connect scheme to the long overdue destruction of barriers to foreign ownership of banks, insurers and rating agencies, China has made dramatic steps to open up to the world.
Bond Connect has only been around for a year, but the impact of its revolutionary approach to China market access is already widely felt. There have certainly been teething problems, but for investors around the globe, the scheme has finally unlocked an opportunity to invest in China’s $11tr bond market. GlobalRMB sat down with leading players in the market to discuss Bond Connect’s unfolding story.
China’s substantial liberalisation of its onshore capital market has given a new lease of life to the internationalisation of the RMB. But if the RMB is to succeed as a truly global currency, China must reverse measures introduced three years ago, provide access to hedging as well as liquidity and risk-management instruments, and eventually allow its currency to float. Paolo Danese reports.
This is the 40th year of China’s reform and opening up. As pointed out in the report of the 19th National Congress of the Commu¬nist Party of China, “China will not close its door to the world; we will only become more and more open”.
Volatility in Asian dollar bonds has put the focus on marketing tactics deployed by banks, and in particular some Chinese securities houses, to win over investors — tactics that are distorting price discovery and putting pressure on the secondary market. Are standards falling in the region? Rashmi Kumar finds out.
China’s green bond market has quickly become one of the largest in the world. But a big part of the market still does not meet international standards. Matthew Thomas reports.
There have been numerous attempts to kickstart a Belt and Road bond market. But bankers are confused what that means in practice – and investors are unsure why they should care, writes Matthew Thomas.
Supply of asset-backed securities (ABS) is growing in China. But most international banks, investors and originators are sticking to the segment of the market they know best — auto loan ABS. To get these foreign players out of their comfort zone, China needs to introduce more diversity in the market, bankers say. Noah Sin reports.
When MSCI finally included the first batch of A-shares in its emerging markets index in June, it pushed a broad range of international investors to dip their toes in Chinese stocks for the first time. But as speculative retail flows continue to dominate the market, some are turning to opportunities outside the benchmark. Noah Sin reports.
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