Performance Magazine - issue 33

Article

Performance Magazine - issue 33

September 2020

As we write this, the news of Blackrock being granted permission to set up a 100 percent foreign-owned mutual fund management company in China has whipped up a media frenzy. After much anticipation, preparation and speculation, Blackrock is now the first organization to receive such a license from the China Securities Regulatory Commission (CSRC), representing the regulator’s most significant step taken to address the continued capital markets reformation and opening-up policy.

Due to its sheer size, no global investment managers can afford to ignore the Chinese market. Also, when global capital markets experienced turbulence due to COVID-19, the Chinese economy and stock markets showed resilience and a speedy recovery even after a government-enforced national shutdown. The mutual fund segment experienced unprecedented growth, and subscriptions for new funds are way over initial fund offerings. Due to cultural differences, the unique style of the regulators, and the nature of how the market is developing, many investment managers feel an urgent need to analyze the media reporting of the Chinese markets and identify the real opportunities.  

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