China Times (www.chinatimes.net.cn) reporter Chen Feng, intern reporter Zhang Mei reported in Beijing
Another foreign-funded institutions have applied for qualified overseas institutional investor (QFII). Recently, the global investment management company, giant Wellington Investment Management Company, submitted QFII application materials to the China Securities Regulatory Commission.
As of the end of August 2022, 711 institutions have obtained qualified overseas investors, especially after 2020, with the release of new regulations on qualified overseas institutional investors (QFII) and RMB qualified overseas institutional investors (RQFII) (RQFII) html, QFII qualifications have accelerated their implementation.
"This also means that China and Chinese assets are now increasingly valued by international capital." He Li, chief investment advisor of Guotai Junan Securities , told the reporter of " China Times " that the continued steady growth of China's economy, and the total share of the total volume has become increasingly important in the world. The scale of the consumer market and manufacturing industry is leading the world; China's capital market and financial sectors are also becoming increasingly open; many of China's industries are leading the way in the world, which international capital cannot ignore. Therefore, international capital's attention to China's capital market continues to increase, and the need to allocate Chinese assets continues to increase. Wu Wei, chief investment consultant of Datong Securities , told the reporter of the China Times that economic fundamentals are the confidence to attract foreign capital in my country's capital market. It is precisely because of the outstanding performance and strong development trend of China's macroeconomics that foreign capital continues to maintain enthusiasm for my country's capital market. This is a positive feedback process. China's strong economic background attracted foreign capital, and the entry of foreign capital further promoted China's economic development, complementing each other and strengthening each other.
7 trillion giants are deploying A shares
Wellington Investment Management Company recently submitted QFII application materials to the CSRC. The approval progress on the official website of the CSRC shows that it is currently in the receiving and acceptance stage.
public information shows that Wellington was founded in 1928. As a global comprehensive investment management company, Wellington has served various institutional clients around the world for more than 90 years, including pensions, sovereign wealth funds, charitable funds, foundations, family offices, and insurance companies. The business has expanded from the Boston headquarters to the international community, including the Asian Financial Center.
As of the end of 2021, Wellington Investment Management has managed more than US$1 trillion in customer assets (over RMB 7 trillion) worldwide, serving as investment consultants for more than 2,464 clients in 62 markets.
Wellington Management Hong Kong Limited is one of the 16 offices of Wellington Investment Management Company worldwide, mainly covering Asian businesses.
Day Eye Check Data shows that Wellington Management Hong Kong Co., Ltd. was established in January 2003 and is located in the Hong Kong Special Administrative Region. It is a company mainly engaged in serving other institutions related to the functions of depositing banking.
In recent years, Wellington Investment Management Company has accelerated its layout in China. In August 2019, Wellington Private Equity Fund Management (Shanghai) Co., Ltd. was established, which is the controlling shareholder of its 100% equity.
In January 2022, Wellington Universal Private Equity Fund Management (Shanghai) Co., Ltd. was established, which is 100% owned by Wellington Private Equity Fund Management (Shanghai) Co., Ltd.
Tianyan Check data shows that the legal persons of both companies are guest . Zhang Jiabin is a master's degree in business administration, and has served as vice president of Shenzhen Everbright America (New Jersey), business manager of UBS Huabao (New York), assistant general manager and marketing director of Fuguo Fund Management Co., Ltd., deputy general manager and chief marketing officer of Xincheng Fund Management Co., Ltd., chief operating officer of China Everbright Asset Management Co., Ltd. (Hong Kong), general manager of Minsheng Jiayin Fund Management Co., Ltd., etc.
According to public media reports, Gu Sujun, senior managing director of client business of Wellington Investment Management and president of Asia Pacific, said that obtaining QDLP qualification and completing registration is an important milestone in the company's business development and layout. China is an important global growth market and has long-term potential for Wellington and an indispensable part of the company's global and Asian development strategies.
How attractive is China's capital market? Wu Wei told our reporter that first of all, the valuation of in the A-share market is very attractive. At present, the stock market valuations in developed markets such as the United States are already very high. The valuation of A-shares is still at a reasonable level, which means there are more opportunities. In addition, judging from the current global economic situation, many countries have moved towards negative growth, and China has timely and effectively controlled the epidemic, and the economic vitality has continued to be released. The A-share market has a promising future. Therefore, A-shares are highly attractive to foreign capital.
QFII qualifications are accelerated to be implemented
On November 7, 2002, the China Securities Regulatory Commission and the central bank jointly promulgated the "Interim Measures for the Management of Domestic Securities Investment in Qualified Overseas Institutional Investors ", which came into effect on December 1, 2002. On May 23, 2003, Swiss Bank and Nomura Securities Co., Ltd. took the lead and became the first foreign-invested institutions to obtain qualified overseas investors.
After that, foreign institutions such as Morgan Stanley International Co., Ltd., Citi Global Finance Co., Ltd., Goldman Sachs , Deutsche Bank , Hong Kong and Shanghai HSBC and other foreign institutions have obtained QFII qualifications.
In 2020, with the release of new regulations on qualified overseas institutional investors (QFII) and RMB qualified overseas institutional investors (RQFII) in RMB, QFII qualifications are accelerated. In 2020 alone, 71 foreign-funded institutions obtained QFII qualifications; in 2021, the number of foreign-funded institutions obtained QFII qualifications jumped to 119.
According to the list of qualified overseas investors of the China Securities Regulatory Commission, as of August this year, 711 foreign-invested institutions have obtained qualified overseas investors, an increase of more than three times from 10 years ago.
And in 2022, the number of QFIIs increased by 43. In August 2020 alone, at least 6 companies qualified overseas investors were approved.
Specifically, on August 24 this year, Zhitou Consulting Co., Ltd.'s qualifications for qualified overseas investors were approved. On August 18, the qualifications of qualified overseas investors of Alpha Oryx Co., Ltd., Macau International Bank Co., Ltd., Lianfengheng Insurance Co., Ltd. and Lianfengheng Life Insurance Co., Ltd. were approved; on August 12, the qualifications of qualified overseas investors of Connor and Clark Lunn Investment Management Co., Ltd. were approved.
What is the reason for the accelerated implementation of QFII qualifications after 2020? He Li told our reporter that the implementation of the new regulations on QFII and RQFII has lowered the entry threshold for foreign investment and expanded the scope of investment, greatly facilitating foreign investment in China's stock and bond market. Foreign institutions are interested in investing in A-shares. In addition, domestic capital market reform is constantly advancing, becoming more standardized and transparent. At the same time, derivative tools that are conducive to risk management by institutional investors, such as ETF options, are also being launched in full swing, which are all factors that attract foreign capital to accelerate its entry into the Chinese market.
Wu Wei told our reporter: "In the process of China's sustained economic growth, the profitability of A-share listed companies has been continuously improving, and China's assets are constantly increasing in attractiveness to foreign capital, which has attracted the continuous layout of external funds."
Wu Wei pointed out that the past 10 years have been the 10 years since my country's economic strength has reached a new level. As the backbone of China's economic development, the profitability of listed companies has been continuously increasing. With the high-quality development of , China's economic development has not only maintained reasonable quantitative growth, but also achieved steady qualitative improvement. At the same time, with the continuous institutional reform of the capital market, the road to opening up China's capital market is becoming more and more smooth, and the long-term market environment for "willing to come and keep" funds is gradually formed, and foreign capital entry has become more efficient.
The significance of foreign capital joining A-shares
Foreign institutions join the Chinese capital market through QFII. What is the significance of this to the Chinese capital market?
He Li said that foreign capital has actually been investing in the Chinese capital market through QFII for several years. They brought new institutional funds and also their value concepts in investment. To a certain extent, it has had an impact on domestic investors in China and has also played a leading role in the local area. The integration of international and domestic capital is of positive significance for our asset pricing to be more internationalized.
Wu Wei said that foreign investment strategies are of great reference significance for domestic investors in A-shares.Foreign capital pays more attention to the industrial layout, past performance and performance expectations of listed companies, considering the market value of and its share to ensure the liquidity of holdings , and conducts more active industrial trend layout in terms of long-term value, but pays too much attention to short-term speculation in the market.
Wu Wei pointed out that with the efforts of the regulators, China's capital market is moving towards internationalization and marketization, gradually maturing, and increasing the QFII quota will help continue to expand the scale of foreign capital participation in A-shares, optimize the structure of participants in China's capital market, and reconstruct the capital market value investment order.
In addition, Wu Wei also believes that many foreign capital tend to decide on buying and selling according to the valuation level, and start to buy gradually when the valuation of A-shares is low. This long-term value investment strategy is worth learning from by small and medium-sized investors. At present, small and medium-sized investors account for a relatively high proportion of the A-share market, among which retail investors have a large speculative component. However, as A-shares become more and more mature, the long-term investment strategies of these foreign institutions can provide some reference for small and medium-sized retail investors in A-shares.
Editor: Yan Hui Editor-in-chief: Xia Shencha
