China's bull market is a test for brokerage technology

Written by Denis Suslov || March 25 2015

As China's bull market continues, new accounts are being opened and trading volume is growing. One unexpected outcome is that existing capital markets technology is being stress tested and it doesn't seem to be coping that well...

The new fashion of Asia stock connects

Written by Kapronasia || March 20 2015

With the Taiwan - Singapore now on track for year end, we are seeing a tremendous uptick in cross-border trading efforts, but instead of M&A, exchanges are focusing on trading links

A look at Options Trading in China

Written by Denis Suslov || February 11 2015

China’s capital markets are maturing. Futures and margin trading had already been launched, but this week we saw equity options for the first time in China. The new derivatives trading commenced with big fanfare, with main regulators as well as top government officials present at the opening ceremony, emphasizing the importance of the event.

2014 was a good year to be a bank in China, but apparently an even better one to be a brokerage. The latest data from the Securities Association of China shows that 2014 total income for the industry was 260.3 billion RMB (Chinese Yuan), up 63% from 2013.

The Singapore Exchange (SGX) has plans to launch a FTSE China A50 Index Futures option product if / when it is approved by the China Securities Regulatory Commission (CSRC). While the new product name can be confusing for those who don’t follow Asian stock and derivatives markets closely, it simply means that investors in the region will have a hedging tool for the rollercoaster stock markets of China. Up more than 40% since November last year, the stock market dipped several times in January. Since the Shanghai-Hong Kong Stock Connect launched, the attention on Chinese A-shares has been unprecedented and additional investor interest should drive demand for exposure and hedging tools.

A bit outside of our normal commentary, but an article sheds light on how low-latency technology is important in China, but for buying train tickets.

Alibaba is yet again launching another investment product, and this time it will give its Alipay customers the option to invest in gold.

Conventional wisdom and the written history of capital markets would have it that the value of a particular stock is based on the potential of future returns in the form of dividends and the underlying book value of the company. Not ones to stick with tradition, China’s mainland investors have often defied this basic tenant of reason and developed their own ideas about what the price of any particular stock should be.

Shanghai Composite Index hitting new highs

Written by Jan Jetter || December 01 2014

After years of bearish sentiments among Chinese investors, the Shanghai Composite Index seems to be picking up again and rises to highest level since August 2011.

Alibaba pours more money into Hundsun, this time in market data

Written by Zennon Kapron || November 27 2014

Alibaba's not so subtle move into China's financial services industry took another step forward today with an additional investment into financial data and software provider Hundsun.

According to new data released by China Securities Depository and Clearing (CSDC), Chinese investors have opened 243,073 new A-share accounts in the period between November 10th and November 14th.

The PBOC has issued implementation rules for RMB cash pooling in China, which will facilitate cross-border RMB sweeping for multinationals, previously restricted to the Shanghai Free Trade Zone (FTZ).

The Empire Re-emerges: Baidu Launches Baifa 100 Index Fund

Written by Fiona Zhao || November 07 2014

Baidu Baifa 100 Index Fund, the first big data-based quantitative strategy fund in China, announced that it was closed for new investors only  24 hours of online sale at 15:00 on October 28th.

HK-Shanghai (Broken) Connect

Written by Zennon Kapron || October 27 2014

How’s that trading on the HK-Shanghai coming for you today? We had hinted at it before in the previous couple of weeks, but it looks like the HK-Shanghai connect is delayed indefinitely with some sources saying anything from a two week to two month delay.

Account unification will squeeze broker commissions in China

Written by Denis Suslov || October 10 2014

Starting from October 8th China Securities Depository and Clearing will assign a single unified account number to all A-share and closed-end mutual fund account holders. Previously, accounts were separated to the respective Shanghai and Shenzhen branches of the clearing company.

What to expect from the Shanghai-Hong Kong Stock Connect?

Written by Jan Jetter || October 07 2014

The Shanghai-Hong Kong Stock Connect Program is launching in mid October and significant changes to the Chinese capital markets landscape are to be expected. Also labeled as the (new?) “Through Train”, this program will give foreign retail investors access to 568 Shanghai-listed stocks, with a market capitalization of roughly USD 2 trillion, and many are already waiting in anticipation for the door to be opened. A brief analysis of the Shanghai Hong-Kong Stock Connect.

Wanda, Baidu and Tencent to Set up a New E-commerce Company

Written by Fiona Zhao || September 08 2014

With Alibaba in the US for a one-week road show before what might be the biggest tech IPO that we've ever seen, Alibaba's competitors are battening down the hatches for an extended battle for the face of e-commerce in China.

The Australia Securities Exchange reported a year on year increase on revenue and profits yesterday on the back of strong IPO performance. Net income hit A$383.2 million from A$348.2 a year before.

The Shanghai–Hong Kong Stock Connect is coming soon as dates for official testing are announced already. According to HKEx, market rehearsals will be held since late August to September, where exchange participants will conduct trading, clearing and settlement activities to verify readiness of the all involved systems.

Despite China’s present technology boom, Internet penetration is still a mere 47%.

The recent news story about Bank of China allegedly assisting with illegal money transfer ended well for the bank and turned out to be a case of journalists not doing enough research...

Lagging Growth: Chinese Stock Market Trading Volume

Written by Denis Suslov || July 23 2014

Despite the regulators’ effort in boosting investor’s confidence in post-hiatus IPOs, growth in Chinese stock market growth in trading volume is still sluggish.

On June 11 2014, MSCI Inc. indicated that China’s A-shares will not be included in MSCI’s global index, meanwhile, South Korea and Taiwan will not be considered to upgrade to developed market status.

In the latest SWIFT RMB tracker report, usage of RMB in cross-border payments involving HK and China increased 36% to 12%, but still has ways to go.

Zhaopin, a late comer to the NYSE

Written by Fiona Zhao || June 30 2014

Shortly after Jumei Youpin, JD.com listed in US, Zhaopin, an online recruitment platform, listed on the NYSE on June 12th, 2014.

State Council is China’s main governing body and its opinions provide guidance for the financial industry and allow to peek into what the government has in mind for the markets in the coming years.

Consumer-brand companies in the Chinese IPO pipeline

Written by Denis Suslov || June 24 2014

Since the IPO hiatus last year many qualified mainland companies have been waiting for new capital. With banks traditionally more supportive of SOEs and PE not being able to invest since much of their capital have been locked already, many well-managed, fast-growing companies were starving of capital.

The RMB continued its relentless march towards being a trade currency with over US$15 billion in RMB bond issuance in the city-state of Singapore - more than doubling the issuance of 10 years ago.

Why Did JD.com Suddenly Decide to List on NASDAQ?

Written by Fiona Zhao || June 10 2014

On May 22nd, JD.com listed on NASDAQ, with the timing being somewhat of a surprise for many market observers.

With the introduction of regulations on preference shares by the CBRC and PBOC in this March and April, banks seem to be willing to explore the new financing option.

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