China Capital Markets Research
Shanghai’s new NASDAQ STAR exchange – a supernova or just another Made-in-China flashlight?
Can Shanghai’s new NASDAQ-style exchange really become a NASDAQ and can Shanghai become New York?
Europe puts the brakes on Chinese investment
The United States is not the only major economic power turning cold on Chinese investment. Now the European Union, China's largest trading partner, is having second thoughts of its own about allowing China to buy up its prime manufacturing and high-tech assets. Concern amongst the EU's heavyweights, including Germany, France and the United Kingdom, is significant, analysts say. While weaker states in the EU, notably Greece, continue to welcome Chinese investment, they are increasingly in the minority.
China's P2P Driven Liquidity Risk
One morning in July, investors of Niubanjin Finance, a P2P platform with balance of 39 billion RMB at that time, tried to check their balance online, but only saw a system maintenance notification. They started feeling anxious and visited the local office in Hangzhou, only to find that the office had closed, and two policemen there to record their investment information, as proof of victims.
Mobile Wealth Management grows in China
More and more Chinese individuals have accumulated a great amount of wealth thanks to the country’s economy boom in the past decades. As a result, the demand of wealth management is growing. With the help of new technologies, mobile wealth management (MWM) platforms are attracting more and more investors in China recently.
Who Will Win The Trade War?
President Trump’s latest controversial policy of imposing tariffs on the EU, Canada and China has shook global trade. With around $34bn worth of tariffs on Chinese goods (with more tariffs proposed), he aims to reduce the US’s trade deficit with the hope that American consumers will buy less Chinese goods and more American goods, thus increasing net exports and GDP. However, China has retaliated with its own tariffs against the US (worth the same amount). It is clear that neither side wants to back down first so who will win this trade war?
On April 29th, the CSRC (China Security Regulatory Committee) officially released the Administrative Measures for Foreign-Invested Securities Companies.
China's outbound M&A & National Security
China's recent outbound M&A has been suffering with more and more acquisitions failing due to national security concerns, Ant Financial's missed acquisition of MoneyGram being the latest. Why does national security factor into these decisions and why will it remain a crucial consideration in the future?
China sets up new financial regulator
Two weeks after the 19th Communist Party of China (CPC) national congress, the Chinese state council set up the Financial Stability and Development Committee (FSDC), as the institution to ensure the stability of the financial system and provide solutions for future development.
How China became the world leader for ‘Unicorns’
In the venture capital industry, a ‘unicorn’ refers to any technology start-up company which has reached a valuation of over USD $1 billion, as determined by private or public investment. The term was devised by venture capitalist Aileen Lee, founder of CowboyVC, a venture capital fund based in Palo Alto. She discovered that only 0.07% of software start-ups founded in the 2000s would ever reach a $1bn valuation, thereby being as rare as finding a unicorn.
Qudian lnc, the Chinese micro lending company, has filed for a U.S. IPO at the NYSE earlier last month. It plans to raise up to USD $750 million in capital to spend on strategic acquisitions, marketing and borrower engagement. In only a few years, Qudian has become an eye catching internet lending company with a valuation of over $6.9 billion USD. Qudian’s remarkable success in such a short period of time, shows how profitable the cash loan market can be, as well as the incredible opportunities for transformation that can arise when collaborating with internet giants like Alibaba.
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The equity market cross-connects between Hong Kong and Shanghai, and Hong Kong and Shenzhen have begun to show signs of growing maturity.
China’s MSCI entry will have little short-term effect on financial markets, big impacts elsewhere
MSCI, the influential provider of stock market indexes, has made the long-awaited decision to add Mainland Chinese A shares to its emerging markets index. 222 stocks from the Shanghai and Shenzhen exchanges will be added to the index. These 222 shares will represent just 0.7% of the emerging markets index, which is tracked by and estimated $1.6 trillion in funds.
Historically speaking, it has been very difficult for Chinese investors and institutions to invest their money overseas. The Chinese government has several reasons for tightly regulating capital outflows, the most important of which is controlling the value of the yuan. However, as a continuation of China’s broad plan to become more integrated into the globalized economy, the government has been encouraging cross-border investment through programs that allow Chinese investors to invest overseas, and programs that allow foreign institutions to invest in the mainland.
The Chinese bond markets are becoming more accessible through regulatory initiatives and greater foreign investor participation.