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Today’s China Top Five: 💡 𝗦𝘁𝗼𝗰𝗸 𝗘𝘅𝗰𝗵𝗮𝗻𝗴𝗲𝘀 | 𝗦𝗦𝗘, 𝗦𝗭𝗦𝗘 The Shanghai and Shenzhen Stock Exchanges are exploring differentiated fee structures for high-frequency trading, emphasizing fair treatment for domestic and foreign institutions alike. 💡 𝗕𝗼𝗻𝗱𝘀 | 𝗣𝗕𝗼𝗖 PBOC sent inquiries regarding banks’ bond investments to regional lenders in Zhejiang, Jiangsu and Jilin as it attempts to cool the overheated bond market. 💡 𝗣𝗿𝗶𝘃𝗮𝘁𝗲 𝗙𝘂𝗻𝗱𝘀 | 𝗤𝘂𝗮𝗻𝘁𝘀 Domestic quant private equity assets suffered a significant AUM decline of 35% in 1H24, falling from RMB1.1tr to RMB780bn largely due to the selloff of micro-caps and heightened market volatility. 💡 𝗠&𝗔 | 𝗙𝘂𝗻𝗱 𝗠𝗮𝗻𝗮𝗴𝗲𝗿𝘀 Separate auctions of two small FMCs took place recently, each resulting in no-sales. A 22.6% equity stake in Donghai, and a 30% equity stake in @Qianhai Alliance failed to attract any bids. 💡 𝗣𝗲𝗻𝘀𝗶𝗼𝗻𝘀 | 𝗕𝗢𝗦𝗖 BOSC Asset Management announced it was cutting management and custody fees for its Hengtai Stable Pension One-Year Mixed FOF for both A-class and Y-class shares, to better meet investor requirements and reduce costs.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

According to a recent report released by the Securities and Futures Commission (SFC), AUM in Hong Kong's asset and wealth management business rose 2% year-on-year to HK$3,119.3 billion ($3,993 billion) as of December 31, 2023. The asset and wealth management business recorded a net capital inflow of HK$389 billion (about $50 billion) in 2023. The assets of investors from outside Hong Kong amounted to HK$1,935.7 billion($248.80 billion), accounting for 64% of the total. China Mainland-related firms continued to expand their footprint in the city, as the AUM of their asset and wealth management business grew 4% to HK$2,676 billion ($343 billion), outperforming the industry average for another year. Their net fund inflows increased 16% to HK$153 billion ($20 billion). By the end of 2023, the number of professional practitioners engaged in asset and wealth management activities in Hong Kong stood at 53,883, an overall increase.Bullish on Hong Kong's future as a global financial center and wealth management hub. #China #Hongkong #wealthmangement #global #financialcenter

I actually don't particularly enjoy political discussions and I want to keep the discussion focused on money and finance. The trouble is that you can't really discuss the future of money without getting into discussions of geopolitics. So to pull the discussion back into the numbers..... Here is the latest report of the SFC on Hong Kong AUM. When you look at this stuff you want to see what is mentioned and what is *NOT* mentioned. 1) Virtual assets and tokenized assets are basically a rounding error. Right now the AUM for coinbase is about USD 100 billion and the AUM of tether is about USD 100 billion also. The AUM for one of the exchanges in HK (OSL) is about USD 100 million. If you guess how large the HK virtual asset industry is in, then its small. 2) The number of Mainland assets seems pretty small to me. For the most part Hong Kong has traditionally been the location of money trying to get *in* to the Mainland, whereas I think the big future is money getting out of the Mainland. All of this is part of this big master plan. Chinese have an incredibly high savings rate and traditionally this has gone to real estate. That game is over so the next stage is to start investing in tech. https://lnkd.in/guWPvN-n

ETFs in China weren’t supposed to be a favored product category. Unlike other markets, the required drivers of demand simply weren’t present. To a great extent this dynamic still holds, it just doesn’t matter. Policy is now driving flows. A policy seeking to dampen retail equity market participation. In this video, Peter Alexander provides a quick “state-of-play” and some reasoning behind why flows in the current year have overwhelming favored ETFs (not including fixed income). He also weighs in on whether the policy goals can be achieved. Could it be that this time might be different? Full video is found here: https://lnkd.in/gYA86RDx

Hong Kong’s retail fund industry reversed its worst-ever annual outflows by registering small net inflows of US$187 million last year, propped up by strong inflows from investors rushing into bond funds. Retail investors fled from equities and mixed-asset funds last year, however, which collectively saw net redemptions close to US$5 billion, as Hong Kong and mainland Chinese stock markets continued their prolonged decline. After recording its largest outflows of US$7.74 billion in 2022, the territory’s mutual fund industry got off to a strong start last year, coinciding with the lifting of Covid-19 restrictions in Hong Kong and mainland China.Hong Kong investors invested a net US$938.5 million in January and US$1.45 billion in February, far and away the two biggest months for net sales last year, according to the latest data from the Hong Kong Investment Funds Association. However, Hong Kong’s fund industry failed to sustain this momentum in the subsequent months. From September, the industry descended to net outflows which worsened in the final quarter, culminating in US$1.46 billion of net redemptions in December. #IgnitesAsia

Today’s China Top Five:   💡 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝗶𝗲𝘀 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 | 𝗠𝗶𝘇𝘂𝗵𝗼 CSRC provided feedback on the securities company establishment application from Mizuho. The feedback focused on the scope of business, planning, and the qualifications of the proposed chairman and general manager. 💡 𝗡𝗲𝘄 𝗟𝗮𝘂𝗻𝗰𝗵 | 𝗠&𝗚 M&G Investments launched the M&G China Fund which uses a bottom-up stock-picking approach with a strong emphasis on risk pricing. The fund will be managed by David Perrett, with support from a Singapore-based team, and is benchmarked against the MSCI China with 100% China A Share Index. 💡 𝗦𝘁𝗼𝗰𝗸 𝗖𝗼𝗻𝗻𝗲𝗰𝘁 | 𝗦𝗙𝗖, 𝗖𝗦𝗥𝗖 SFC issued guidelines allowing intermediaries to distribute research reports in Hong Kong on Mainland ETFs eligible for trading via the Stock Connect. This is a reciprocal action after CSRC indicated that research reports on Stock Connect-included Hong Kong-listed ETFs can be distributed onshore. 💡 𝗗𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 | 𝗦𝗮𝗹𝗲𝘀 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 Financial product distribution revenues declined in the first half of 2024 for both banks and brokerages. Many institutions saw double-digit falls in distribution income. For instance, CITIC Securities Company Limited’ income dropped by 11%, and other major brokerages like Huatai Securities Co., Ltd. and GF Securities experienced even larger declines. 💡 𝗛𝗮𝗹𝗳-𝘆𝗲𝗮𝗿 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 | 𝗕𝗮𝗻𝗸 𝗪𝗲𝗮𝗹𝘁𝗵 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 Bank wealth management companies saw significant growth, with listed banks' wealth management subsidiaries achieving a 14% YoY increase in net profits. The subsidiaries of China Merchants Bank, China Industrial Bank and Industrial and Commercial Bank of China maintained the top three positions in terms of AUM.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Today’s China Top Five: 💡 𝐈𝐧𝐛𝐨𝐮𝐧𝐝 | 𝐂𝐒𝐑𝐂 Shen Bing stated that the CSRC, in collaboration with the Ministry of Commerce, recently clarified operational guidelines for tax incentives for sovereign funds investing through the FII channel. CSRC is currently drafting revisions to rules on short-swing trading and algorithmic trading to reduce uncertainties for foreign investors in China’s market. 💡 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝘀 | 𝗦𝗦𝗘 According to Shanghai Stock Exchange data, 20.31 million new accounts were opened in the first ten months of 2024, with 6.85 million opened in October alone. October 2024 saw an average daily turnover rate of 2.64%, a notable increase from the 1.2% average during January to September. 💡 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽 | 𝗔𝗘𝗚𝗢𝗡, 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗮𝗹 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝗶𝗲𝘀 On November 6, Yang Huahui, Chairman of Industrial Securities Co.,Ltd., met with Lard Friese, CEO of Aegon, in Shanghai to discuss strengthening their strategic partnership and development plans for AEGON Industrial FMC. 💡 𝗖𝗦𝗜 𝗔𝟱𝟬𝟬 | 𝗡𝗲𝘄 𝗟𝗮𝘂𝗻𝗰𝗵𝗲𝘀 On November 6, the GF CSI A500 Index Fund and the CMB CSI A500 ETF Feeder Fund announced their establishment. These funds raised substantial net amounts: RMB7.996bn and RMB4.712bn, respectively, both ranking among the top three equity fund launches this year. 💡 𝗕𝗮𝗻𝗸 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 | 𝗠𝗶𝗻𝗶𝘀𝘁𝗿𝘆 𝗼𝗳 𝗙𝗶𝗻𝗮𝗻𝗰𝗲  The Ministry of Finance, with support from financial regulators, is advancing plans to inject capital into major state-owned banks using special treasury bonds. This initiative will bolster core Tier 1 capital in a phased, bank-specific approach.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Today’s China Top Five: 💡 𝗡𝗲𝘄 𝗦𝗵𝗮𝗿𝗲𝗰𝗹𝗮𝘀𝘀𝗲𝘀 | 𝗙𝗠𝗖𝘀 Since the start of November, eight fund companies, including Guotai, Tianhong and ChinaAMC, have added new share classes to over 30 products. Guotai added E-class shares that do not charge subscription fees but include a 0.30% annual sales service fee. 💡 𝗣𝗕𝗼𝗖 𝗪𝗼𝗿𝗸 𝗥𝗲𝗽𝗼𝗿𝘁 | 𝗡𝗣𝗖 PBoC Governor Pan Gongsheng emphasized maintaining a supportive monetary policy stance, increasing the intensity and precision of monetary policy adjustments to bolster economic stability. He also expressed a desire to improve policy tools aimed at addressing abnormal stock market volatility. 💡 𝗙𝗶𝗻𝗳𝗹𝘂𝗲𝗻𝗰𝗲𝗿𝘀 | 𝗖𝗦𝗥𝗖 Local securities regulators have issued notices to investment advisory firms, requiring comprehensive management of corporate and employee social media accounts and compliance checks on live-stream content, with a strict ban on stock recommendations during live sessions. 💡 𝗡𝗲𝘄 𝗟𝗮𝘂𝗻𝗰𝗵 | 𝗖𝗦𝗜 𝗔𝟱𝟬𝟬  On November 11, E Fund Management Co.,LTD.'s CSI A500 Index Fund was officially established, having raised RMB7.987bn. It became the second largest among CSI A500-linked funds, following the GF CSI A500 Index Fund. 💡 𝗥𝗮𝘁𝗲 𝗖𝘂𝘁𝘀 | 𝗕𝗮𝗻𝗸𝘀 China's six largest state-owned banks, including ICBC and CCB, announced a reduction in deposit rates, dropping below 2%. This marks the second cut this year and the sixth since September 2022. Many smaller banks followed suit, narrowing the interest rate gap with major banks.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

📈 The Hong Kong Monetary Authority recently announced that excluding valuation changes in long-term portfolios, the Foreign Exchange Fund recorded an investment income of HKD 114.6 billion for the third quarter ending in September. This marks a year-on-year profit and reaches the highest level since 2005! 🎉 #HongKong #Investment #Finance #EconomicGrowth #ForeignExchange #RecordHigh #MonetaryAuthority #MarketTrends #JIGFamilyOffice https://lnkd.in/g5aG2bKf

Today’s China Top Five:   💡 𝗕𝗡𝗣 𝗣𝗮𝗿𝗶𝗯𝗮𝘀 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 BNP Paribas has been approved to establish a wholly-owned securities company onshore. The entity will be based in Shanghai and has a registered capital of RMB1.1bn. This approval comes three years after the application was first received by CSRC and two years after its initial feedback from the regulator.   💡 𝗖𝗦𝗜 𝗣𝗹𝗮𝗻𝘀 𝗡𝗲𝘅𝘁 𝗠𝗮𝗷𝗼𝗿 𝗜𝗻𝗱𝗲𝘅 Shortly after the launch of the CSI A50 index, China Securities Index Co., Ltd. is preparing an A500 index. The index will be comprised of the largest 500 stocks by market cap, while also maintaining balanced sector exposure. Leading fund managers have already expressed an interest in launching ETFs tracking the upcoming index.   💡 𝗕𝗮𝗻𝗸 𝗪𝗲𝗮𝗹𝘁𝗵 𝗔𝗨𝗠 𝗥𝗲𝗰𝗼𝘃𝗲𝗿𝘆 Estimates suggest bank wealth management AUM has rebounded by RMB1.8tr in the first two weeks of April, following quarter-end redemptions in March. CITIC Securities Company Limited project that the industry will hit RMB30tr in AUM by the end of this year.   💡 𝗕𝗪𝗠𝗣 𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 In March, the lower limit of some bank wealth hurdle rates fell below 3%. There has been a continuous downtrend in hurdle rates throughout 2023 and into this year. As of March, the average for open-ended funds is 3.11%, while closed-ended funds’ average was slightly higher at 3.22%.   💡 𝗕𝗮𝗻𝗸𝘀 𝗧𝘂𝗿𝗻 𝘁𝗼 𝗜𝗻𝗱𝗲𝘅 𝗣𝗿𝗼𝗱𝘂𝗰𝘁𝘀 Bank wealth management companies now offer 23 index products – almost half of which have been launched in the past year. In terms of competition, the wealth management unit of Huaxia Bank, China has the most products at 11, followed by Postal Savings Bank of China Co., Ltd. (8) and Bank of China (4). These products are being deployed to circumvent equity research deficiencies.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews