Improved China Market Lifts International Investors' Confidence, Says Standard Chartered
Ma Yifei
/SOURCE : Yicai
Improved China Market Lifts International Investors' Confidence, Says Standard Chartered

(Yicai Global) June 27 -- China remains an attractive investment destination for foreign investors, the latest market survey released by Standard Chartered PLC [LON:STAN] shows.

More than 60 percent of investors Standard Chartered surveyed ranked China as among the top three investment destinations, nearly 20 percentage points higher than last year.

Standard Chartered studied investment activities and the cycles of over 900 investors in different industries worldwide. Improved investor confidence depends on a stable yuan, the promotion of regulatory reforms, expanded access to the Chinese market and optimism about the country's future investment climate, the bank said.

China has attracted growing attention from public sector organizations such as central banks and sovereign wealth funds since the yuan's inclusion in the Special Drawing Rights basket. As regulatory reforms proceed, China's interbank bond market and stock connect mechanisms are becoming increasingly popular investment channels for emerging investors. New regulatory guidelines require the insurance industry to extend the duration of bonds it holds to meet liquidity requirements, prompting the insurance sector to also prefer China's fixed-income assets. As investment quotas for renminbi qualified foreign institutional investors (RQFII) and qualified foreign institutional investors (QFII) have expanded, investors have not lowered their use of RQFII and QFII quotas.

The Chinese government has also made substantial progress and long-term commitments to opening markets. The bond connect, which may be introduced by July, will be accessible to all investors and offer an investment environment with seamless expansion and easy access governed by Hong Kong law. After the inclusion of China's A shares in the MSCI index, more than 80 percent of respondents believe China will likely be incorporated into international mainstream bond indexes such as the Bloomberg Barclays index, the Citigroup index and the JPMorgan index within two years.

 

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Keywords: Standard Chartered , Investors , Banks , Financial Market