Overseas financial companies accelerate expansion in China
Market brims with potential despite recent shares drop
Overseas financial institutions have continued their expansion into the Chinese market as the new year unfolds, continuing a years-long trend. Despite the shortterm underperformance of A-shares, experts stress the vast scale and significant growth potential of the market, noting that the investment opportunities cannot be overlooked by global asset managers.
“China continues to be the world’s second-largest economy and wealth creation hub and is a key market for UBS. We remain committed to our onshore growth strategy,” Colm Kelleher, UBS Group AG’s chairman of the board, said at its 24th Greater China Conference on Tuesday.
On January 2, US asset management firm AllianceBernstein announced that its wholly foreign-owned enterprise, AllianceBernstein Fund Management Co (AB China), had been granted a license to conduct securities and futures business in China by the China Securities Regulatory Commission.
“We have established a local talent team, equipped with strong research and investment capability, and a deep understanding of onshore investors’ needs, to explore and seize the vast investment opportunities in the Chinese market,” said Alex Qian, general manager of AB China.
Other overseas institutions expanding their footprints in China recently included Singapore-based DBS Bank and various Middle Eastern capital entities.
Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times that recent moves by leading overseas financial institutions to expand their presence in China sent a positive signal about the market, and also debunked absurd hype by foreign media outlets suggesting that overseas capital was withdrawing from China.
China’s economic recovery is expected to see stronger momentum in 2024, especially as further pro-growth policies unfold, and recovery may exceed the expectations of many. As a reliable indicator of economic trends, the capital markets are poised for strength, Yang said.
In 2023, 81 overseas institutions were approved to do Qualified Foreign Institutional Investor business in China, which spanned across 15 countries, regions and international organizations.
While the performance of China’s A-share market hasn’t been particularly outstanding in recent years, it is a shortterm situation, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Tuesday.
The potential for China’s stock and capital markets remains significant. This is attributed to China’s overall leading position in global economic growth, offering plentiful investment opportunities. Coupled with the vast scale of the market itself, there is substantial room for growth, Xi noted.