China stock market inflows could double in 2019 – securities official

Man sits in front of an electronic board showing stock information at a brokerage house in Hangzhou
A man sits in front of an electronic board showing stock information at a brokerage house in Hangzhou, Zhejiang province, China December 3, 2018. REUTERS/Stringer

January 12, 2019

SHANGHAI (Reuters) – The inclusion of Chinese A-shares in global stock indexes could see foreign inflows into China’s stock market double in 2019, the Shanghai Securities News quoted a top Chinese securities regulator as saying on Saturday.

“Last year, net foreign stock market inflows reached 300 billion yuan ($44.38 billion) and this year we estimate that inflows will increase further. We could expect 600 billion yuan,” Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), was quoted as saying at a market forum.

It did not say where the forum was taking place.

Fang said that in addition to the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programmes, the inflows would be driven by a boost in the proportion of A-shares included in MSCI global indexes, as well as the inclusion of A-shares in FTSE Russell and Dow Jones indexes.

Fang also said that a number of U.S., Japanese and European investment banks had applied to raise their stakes in domestic brokerages to 51 percent.

In December, UBS Group <UBSG.S> became the first foreign bank to win approval for a majority stake in a domestic securities joint venture.

Fang said that several foreign banks had expressed a hope to apply to raise their stakes to 100 percent once permitted by regulations, and that the CSRC would strongly support such a move.

China’s benchmark share indexes were among the world’s worst performing equity markets last year, losing around a quarter of their value as the escalating Sino-U.S. trade war put further pressure on the slowing Chinese economy. But stocks have drawn some support over the last month on signs of an easing in trade tensions.

(Reporting by Andrew Galbraith; Editing by Kim Coghill)

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