JPMorgan Chase's Ulrich Considers MSCI Index's Inclusion of A-Shares Likelier This Year
Xu Yanyan
/SOURCE : Yicai
JPMorgan Chase's Ulrich Considers MSCI Index's Inclusion of A-Shares Likelier This Year

(Yicai Global) June 8 -- JPMorgan Chase remains generally confident of bullish Chinese equity markets, Jing Ulrich, its Asia-Pacific vice president, lately reaffirmed.

JPMorgan's sustained confidence in China's equity markets partly results from the improvement of profits and cash flows in Chinese enterprises, Ulrich explained at the recent JPMorgan China Summit 2017 that concluded in Beijing yesterday.

Even more encouragingly, the less volatile yuan exchange rate easing the concerns of capital outflow and the promotion of the One Belt, One Road initiatives will jointly enliven markets, she said.

The Inclusion of China's A Shares in the MSCI Index in the re-assessment on June 20 will be more likely, Ulrich also predicted. When this happens, it will cause a short-term rally in A-shares due to investors' higher expectation of the more frequent entry of foreign capital into Chinese capital markets.

"Foreign capital's entry channels have been altered from QFII/RQFII to Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. We also base our prediction on this change. Meanwhile, anti-competition issues are still left unresolved," Ulrich noted.

With the launch of the Shenzhen-Hong Kong Stock Connect program and the Bond Connect program, the world is more confident in China's capital market, she added. The Bond Connect offers a way for overseas investors to invest in China's bond market. Overseas investors have steadily purchased Chinese bonds over the past two months, indicating that international investors recognize the value of China's fixed-income investment products.

JPMorgan Chase believes the yuan will remain steady this year. "Push of the rate hike on the US dollar is subdued and the US dollar's weakness has pushed the RMB to rise against it. Many other currencies in Asia also saw appreciation against the US dollar. Overall, RMB will remain steady," Ulrich observed.

On China's economic trend for the second half of 2017, either China's steady macroeconomic data or the Belt and Road national strategy will enhance global investors' confidence in investments in China, Ulrich said. She expects China's full-year economic growth to reach 6.7% next year.

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Keywords: A-Share , Capital Flow , MSCI , JPMorgan Chase