Chinese stock market: 234 prospective organizations hit the MSCI Emerging Markets index
Foreign investors have received simplified access to the stock markets of the Middle Kingdom. Analysts predict the inflow of finance in the amount of 60 billion dollars in 2019.
Investment bank Goldman Sachs suggested that at least $ 60 billion of foreign capital would go to China in 2019 (compared with 43 billion in 2018). The explanation for this is in the prospects and growth rates of the economy of the Middle Kingdom, which is in second place after the US. The driver of additional inflows of foreign capital will be simplified access to Chinese exchanges.
2018 was marked by the fact that 234 Chinese organizations are included in the MSCI Emerging Markets index. The securities of these leading firms of class “A” are traded on exchanges in Shanghai and Shenzhen. Earlier this index included only organizations whose shares were listed on overseas sites or in Hong Kong.
The emerging markets index MSCI Emerging Markets includes the best companies in 24 countries, including Brazil, Mexico, the United Arab Emirates, Qatar, Russia, and others. It determines the overall level of inflows of foreign funds into local economies.
Analysts expect China to grow 4 times at MSCI Emerging Markets because it has unlimited potential. The total assets of the index of emerging markets – more than 2 trillion dollars. Entering the index of companies that are denominated in RMB will give an increase in their securities in the region of 20%.
Chinese stock market expects growth in the foreseeable future
But this is not all the news about why foreign finances rushed to the Middle Kingdom. China government securities are included in Bloomberg Barclays. Some analysts attribute this improvement to the mutually beneficial conclusion of the trade confrontation between Beijing and Washington. The Americans finally allowed their investors to make money on China’s assets to the full.
In 2018, China entered $ 120 billion. 2019 will be a record year here too: a foreign presence in the securities markets will increase to $ 200 billion.
Also in 2019, the merger of the Shanghai and London stock exchanges is planned. This will also give an impetus to the additional inflow of foreign money to the class “A” stock market.
Meanwhile, the slowdown in the growth of the global economy has reduced activity in the manufacturing sector of the Middle Kingdom. At the same time, it should not be forgotten that February is a holiday month for China, during which goods were practically not produced, the demand for them increased and, consequently, retail prices also rose.
Analysts say that investing in Chinese stocks during a massive influx of foreign capital can bring decent dividends. For example, the forecast growth of ChinaMobile shares – + 7%.
