Capital Markets-Open Doors-Stronger Foreign Imports Expected to Hit New Record

Capital market “open door to door” stronger, foreign investment scale is expected to hit a new high
Revised and merged QFII / RQFII system, expanded Shanghai-Shenzhen-Hong Kong Stock Connect quota, A-shares successfully entered into Morocco and became rich, the first foreign-controlled securities brokerage was born, and crude oil and iron ore futures were successfully issued to overseas traders . Capital markets are openConstantly speeding up, multiple opening measures have been implemented one after another.  A number of institutions said in an interview with China Securities Journal reporters recently that according to signals disclosed by the director’s management, the capital market will usher in scale reforms this year, and more “introduction” and “going out” policies can be expected.With the continuous improvement of the two-way opening of the capital market and the continuous deepening of market reforms, the scale of foreign exchange 北京夜生活网 that has gradually entered the capital market this year will reach a new high.  In the past few years, China has accelerated the two-way opening of the financial industry on the basis of stable economic fundamentals.For example, the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect and the upcoming Shanghai-London Stock Connect have achieved a two-way interaction between domestic capital markets and overseas markets.”Mr. Stanley Huaxin Securities Chief Economist Zhang Jun said that while promoting the interchangeability of capital projects, the revision of QFII and RQFII management policies and the improvement of investment quotas are conducive to further opening up the internal capital market.Coupled with actively promoting A-shares to replace MSCI and the FTSE Russell Index, relaxing foreign bank management 都市夜网 and foreign exchange securities and futures institutions’ internal policies such as the establishment of legal entities, and opening up credit rating markets, China has achieved remarkable results in the dual opening of finance.The results of gaze.  Zhang Yulong, chief analyst of CITIC Securities Investment Strategy, believes that in the long run, the two-way opening of the long-term capital market has progressed steadily with fruitful results.  First, the domestic capital market is gradually recognized by international investors.After the MSCI index was successfully divided into A shares, the FTSE Russell Index and Dow Jones Index plan to gradually divide A shares into their main index products.  In fact, foreign access to domestic channels is more convenient.The Shanghai-Shenzhen-Hong Kong Stock Connect has operated smoothly since its launch, while QFII and RQFII have gradually expanded in scale and the system has continued to innovate.  Third, the domestic futures market is gradually dating foreign investors.In the end, with domestic crude oil and iron ore futures as the breakthrough point, foreign investors were eventually invited to participate in specific futures trading.  The actual interest rate liberalization policy is expected to be promulgated. “The opening of the capital market will replace capital flows, which may increase financial risks. Therefore, it is necessary to establish a financial regulatory system to prevent risks brought by the opening of the capital market.”Pan Xiangdong, chief economist of New Era Securities, believes that while” introducing “, the capital of developing countries must also” go out “reasonably.At the very least, this will help the capital markets of developing countries integrate with international standards and grow large financial and financial enterprises. Restructuring will help diversify the investment of local residents and improve their welfare.  Therefore, Pan Xiangdong believes that we must adhere to the process of marketization, gradually develop experience, and improve the internationalization of domestic capital markets through continuous innovation, while strengthening financial supervision and maintaining a stable market environment.Specifically this year, the focus of the two-way opening of the capital market may include: continue to expand the proportion of MSCI and other international indexes, continue to advance the Shanghai-London Stock Connect, improve foreign investment securities, futures management measures, improve QFII, RQFII mechanisms, and expand personal directInvest in overseas market channels to rationally advance the internationalization of RMB.At the same time, in the context of the accelerated opening of the capital market, the corresponding external regulatory capabilities will be enhanced and cross-border regulatory cooperation will be strengthened.  ”This year, there will be vigorous changes in the introduction of bilateral financial liberalization, including the upcoming launch of the Shanghai-London Stock Connect and the” Southbound “Bond Connect, which will further open access to foreign exchange financial institutions and expand the scope of business operations.Zhang Jun expects to accelerate the two-way opening of financial trials in key areas such as the Shanghai Free Trade Zone, Hainan Free Trade Zone, and the Guangdong-Hong Kong-Macao Greater Bay Area. Once the experience is mature, it will be promoted nationwide.  Zhang Jun believes that relevant departments will support domestic financial institutions to participate in international financial markets, allow Chinese-funded institutions to participate in the offshore RMB market, securities and futures institutions to carry out cross-border businesses, and expand the opening of foreign exchange settlement and sales pilots by securities companies.The two-way opening of China’s financial market is a general trend, which places higher requirements on preventing systemic risks.Therefore, the two integrated management frameworks of “macro-prudence + micro-regulation” in China should be accelerated, and promoting the domestic regulatory system to be in line with international standards is an important guarantee for the smooth promotion of two-way financial opening.  ”The two-way opening up adheres to the principle of reciprocity in terms of progress and access.At present, foreign countries are making rapid progress in entering developing country markets, while Chinese-funded institutions have made slower progress in entering overseas capital markets, especially the slow progress of securities companies’ overseas business development.“The most critical obstacle is not the restrictions of foreign governments, but the release of the internal foreign exchange business license to the securities brokers that have obtained their overseas business qualifications, resulting in these institutions being unable to truly invest overseas.It is recommended that relevant departments give priority to releasing foreign exchange permits to the securities companies on the right as soon as possible.  The cumulative scale of foreign countries is expected to reach a record. ”Against the background of the weakening global and U.S. economies and rising uncertainties, the certainty of China ‘s economic growth coupled with the replacement of A shares with MSCI and the FTSE Russell Index will continue to attract overseasCapital inflows.”Zhang Jun predicts that the inflow of A-share foreign capital in 2019 will reach a record $ 70 billion-125 billion, which is much higher than the three-year average of $ 35 billion in developing countries.International investors are optimistic about China’s financial opening up. The current relative expectations of A-shares provide a rare window for medium- and long-term allocation.  From the perspective of the stock market, Zhang Yulong believes that if the MSCI weight of the A-share split can be successfully expanded from 5% to 20% at the end of February, it is expected to bring about 460 billion incremental funds.In addition, the A-shares will formally divide the FTSE Russell Index in the middle of this year, which is expected to bring about 120 billion US dollars of overseas funds to the A-share market.  From the perspective of the bond market, Zhang Yulong said that the current attractiveness of the internal bond market to overseas investors is gradually increasing, and it is welcoming significant development potential.From the perspective of active investment, this year’s foreign allocation of incremental funds is expected to be between 2016 and 2017, that is, between US $ 30 billion and US $ 60 billion.From a passive investment perspective, the Bloomberg Barclays Global Composite Index, one of the world’s three largest bond indexes, officially announced that it will issue Chinese bonds in April. Based on the size and relative proportion of funds tracked, it is expected to bring in 50 billion US dollars of incremental funds.  In addition, for Zhang Yulong Bonds, if China Bonds can successfully allocate the Citi (FTSE) Global Government Bond Index earlier this year, LeTV Arithmetic will bring about passively allocated incremental funds of approximately $ 25 billion.From both active and passive perspectives, the foreign exchange increase in the bond market this year is expected to be between $ 105 billion and $ 135 billion.  ”This year, overseas funds will flow into the A-share market through QFII, RQFII, Shanghai-Shenzhen-Hong Kong Stock Connect and other channels, and it is expected to bring about 600 billion yuan in incremental funds.”Inward thinking”, A shares divided by the increase in the weight of MSCI and the FTSE Russell Index this year, the short-term incremental funds exceed 100 billion US dollars, and the long-term incremental funds will reach 1 trillion US dollars.

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