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Foreign capital inflows expected to reach new record high in China

2019-02-18 17:35 Cfbond

By Xie Fang

Several global banking giants released reports recently, predicting that foreign capital inflows to China's capital market, including both the stock market and the bond market, will reach a new record high this year, the China Securities Journal reported Monday.

In its latest report, the US banking giant, Citibank,forecasts that the overall foreign capital inflows to the Chinese capital market will rise to about 200 billion U.S. dollars in 2019 from the 120 billion U.S. dollar last year.

The bank bases its prediction on the facts including the rise of China's A-share stocks as a share of the MSCI index system, the most-followed equity market index in the world, and the official inclusion of China's government bond into the prestigious Bloomberg Barclays Aggregate Index in April. These two moves will surely lead to a significant surge in foreign capital inflows to China, says the report.

The American investment banking titan, Morgan Stanley, also publicized its outlook for foreign capital inflows to China this year in a recent report, anticipating a dramatic increase in foreign investments in China's A-share stock market.

The report says that as a result of China's ongoing financial opening-up and market reforms, the A-share market will receive a total of 70-125 billion U.S. dollars in foreign investments in 2019, which will be more than double an average of 35 billion U.S. dollars for the past three years.

Taking a long-term perspective, the report predicts that the annual foreign investments flowing into the A-share market are expected to stabilize at somewhere between 100 billion U.S. dollars and 220 billion U.S. dollars.

As for China's bond market, the report estimates that the foreign capitals investing in China's corporate bonds will increase to somewhere between 300 billion U.S. dollars and 400 billion U.S. dollars by 2030.

Analyst from the Japanese bank, MIZUHO, also believed that the much-anticipated Shanghai London Stock Connect, which is likely to be launched this year, would direct even more foreign capitals to the Chinese stock market.

责任编辑:Tang Guhan