China Still An Attractive Investment Location For Foreign Investors -- Stanchart

KUALA LUMPUR, June 23 (Bernama) -- China is still an attractive investment location to foreign investors as investor investment appetite for the market remains in a similarly strong level to last year, said Standard Chartered Bank (Stanchart). In a statement Thursday, Stanchart said, this was the conclusion from its second RMB Investors Forum, a programme aimed at engaging market participants on real investment issues around China through a rigorous process of research, debate and analyses. It said the key among this year’s findings was that China was top three priority for more than 60 per cent of investors who responded to the survey, nearly 20 per cent more than those who indicated such in the 2016 survey. Stanchart's Regional Head, Securities Services, Greater China and Northeast Asia, Barnaby Nelson, said after a relatively cool 12 months on China, international investors were showing overwhelmingly strong intent to grow their China investments in the short term. "Our survey underlines that this is due to significant improvements in both the economic outlook and the channels that investors can use to access China. We have made huge progress in a year and there is a strong sense that the end-game is now in sight," he said. Stanchart said based on the survey, this positive outlook from investors stemmed from their confidence that the renminbi will stablilise. It said there were three specific drivers behind this optimism: Public sector institutions, such as central banks and sovereign wealth funds, were increasingly looking at investing in China following the inclusion of the renminbi into the Special Drawing Rights basket by the International Monetary Fund in October 2016; The insurance sector was drawn towards Chinese fixed income assets as new regulatory guidelines require to lengthen the duration of bond holdings to match liquidity; and, There has been a large number of mainland retail investors reinvesting their capital onshore as they are attracted to the short-term investment opportunities, said the findings. Stanchart said the survey also revealed that investors experienced improved regulatory transparency in China, which was the top consideration when deciding on investment channels to use. In addition, it said, with further regulatory reforms, the China Interbank Bond Market (CIBM) and Stock Connect has increasingly become the access channels of choice especially for newer investors. Stanchart said the respondents were also cognizant of the huge progress and commitment from the Chinese government in opening up the market by obtaining an inclusion into the Morgan Stanley Capital International Inc with 50 per cent of the respondents expected the leading bond index providers (Bloomberg Barclays, Citi, JP Morgan) to announce an allocation to China in their main indices next year, while a third of them expected to happen this year. -- BERNAMA