Z-Ben Advisors

𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐞𝐞𝐤 – 𝐉𝐮𝐥𝐲 𝟐𝟔, 𝟐𝟎𝟐𝟒 The total number of QDLP products launched by global managers so far in 2024 has more than doubled the annual total in any year since the first products were rolled out in 2015. Expanded product rosters, paired with more plentiful quota issuances, are starting to see results: a number of firms have been able to grow scale. While continued outbound demand will provide a welcome tailwind for the scheme, there is a potential headwind on the horizon in the form of NFRA proposals to restrict commercial bank distribution of private fund products – which would likely include QDLP. The enactment of such proposals could mean a need to revamp the private bank sales model that has become increasingly effective.

Today’s China Top Five: 💡 𝗘𝘅𝗲𝗰𝘂𝘁𝗶𝘃𝗲 𝗔𝗽𝗽𝗼𝗶𝗻𝘁𝗺𝗲𝗻𝘁 | 𝗚𝘂𝗼𝘁𝗮𝗶  Guotai (30% owned by Generali) has appointed Li Sheng as its new General Manager. Previous roles include various positions at China Construction Bank onshore and in Hong Kong, including most recently within the investment division. 💡 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱𝘀 | 𝗙𝘂𝗻𝗱 𝗖𝗼𝘂𝗻𝘁 The total number of mutual funds in the onshore market topped 12,000 by the end of June. Homogeneity among funds has escalated the issue of mini funds, with more than 3,000 now with less than RMB100m AUM each, risking liquidation. 💡 𝗙𝘂𝗻𝗱 𝗦𝘂𝘀𝗽𝗲𝗻𝘀𝗶𝗼𝗻 | 𝗘 𝗙𝘂𝗻𝗱 On July 24, a gold themed listed open-end fund (LOF) from E Fund Management Co.,LTD. announced a temporary suspension due to its market price being significantly higher than its NAV, with a premium exceeding 20%. Speculative trading in recent weeks has seen the secondary market price far outpace NAV growth. 💡 𝗥𝗮𝘁𝗲 𝗖𝘂𝘁𝘀 | 𝗣𝗕𝗼𝗖 Central Bank commentary has indicated that the recent rate cuts, which have been followed up by deposit rate reductions at major banks, have been implemented to support net interest margins. Industry net interest margin fell to 1.54% in 1Q24, the lowest recorded. 💡 𝗣𝗲𝗻𝘀𝗶𝗼𝗻𝘀 | 𝗕𝗪𝗠𝗣𝘀 Three further pension bank wealth management products have been established, taking the total to 26. The new offerings from ABC WM, BOC WM and Postal Savings Bank WM include two fixed income and one multi-asset product.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

For the past 30+ years, China has been a key issue in the American Presidential election cycle, and this time around it won’t be any different. China rhetoric will run white hot. You shouldn’t be too concerned. If the past is any indication, there is little likelihood of such rhetoric being elevated into actual policy or legislation. Peter Alexander has seen a number of such instances. In this video he goes back in time to the 1992 election cycle when then candidate Bill Clinton loudly claimed that he’d put an end to a national policy which “coddled tyrants from Bagdad to Beijing.” To his credit, and attempt was made. It was just short lived and ultimately reversed. And less than a decade later President Clinton would sign the bilateral agreement that paved the way for China to ascended into the WTO. Full video here: https://lnkd.in/gq_GGGna

Today’s China Top Five: 💡 𝗖𝗼𝗺𝗽𝗲𝗻𝘀𝗮𝘁𝗶𝗼𝗻 𝗥𝗲𝘃𝗶𝗲𝘄 | 𝗙𝗠𝗖𝘀 China Merchants Fund Management Co., Ltd. and Bosera Asset Management Co. have instituted salary caps of RMB3m and RMB2.9m, respectively. The firms plan to claw back any salary in excess of these caps from last year. Both firms are part of China Merchants Group (CMF 100% owned, Bosera 49% owned). 💡 𝗘𝗧𝗙𝘀 | 𝗛𝘂𝗮𝘁𝗮𝗶-𝗣𝗶𝗻𝗲𝗕𝗿𝗶𝗱𝗴𝗲 The CSI 300 ETF from Huatai-PineBridge Fund Management Co., Ltd. (Formerly AIG-Huatai) has surpassed RMB250bn AUM and the E Fund Management Co.,LTD. equivalent is approaching RMB170bn. In all, equity ETFs have attracted more than RMB530bn net flows since the beginning of 2024. 💡 𝗣𝗲𝗻𝘀𝗶𝗼𝗻𝘀 | 𝗣𝗣𝗙 The PPF assets mandated to NCSSF for centralized management stood at RMB1.9tr at the end of June 2024. These funded mandates are unchanged from the end of the first quarter but almost double the level three years prior. 💡 𝗢𝗻𝘀𝗵𝗼𝗿𝗲 𝗣𝗿𝗲𝘀𝗲𝗻𝗰𝗲 | 𝗙𝗿𝗮𝗻𝗸𝗹𝗶𝗻 𝗧𝗲𝗺𝗽𝗹𝗲𝘁𝗼𝗻 Franklin Templeton has denied reports that it is due to close its Beijing representative office after the departure of its China head. The firm has confirmed that the former head of China, Yu Qing, left the company in June but reaffirmed its commitment to the onshore market. 💡 𝗦𝗪𝗙𝘀 | 𝗚𝗜𝗖 GIC has expressed its interest in acquiring the stakes of China units of multinational firms that are deciding to exit the market. The Singaporean SWF is also considering increasing its investments in domestic consumption-related companies.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Today’s China Top Five: 💡 𝗖𝗿𝗼𝘀𝘀 𝗕𝗼𝗿𝗱𝗲𝗿 | 𝗘𝗧𝗙 𝗖𝗼𝗻𝗻𝗲𝗰𝘁 ETF Connect expansion took effect on July 22, with 85 ETFs added to Northbound Stock Connect and six added to the Southbound channel.  On the first day of the expansion, Northbound trading volume reached RMB1.2bn, while Southbound trading volume was RMB1.8 billion. 💡 𝗣𝗲𝗻𝘀𝗶𝗼𝗻𝘀 | 𝗥𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗔𝗴𝗲 𝗖𝗵𝗮𝗻𝗴𝗲 The Third Plenum decision document introduced "voluntary and flexible" principles for gradually delaying the statutory retirement age for the first time. The Decision emphasizes addressing population aging and improving elderly care policies. 💡 𝗦𝗵𝗮𝗿𝗲𝗵𝗼𝗹𝗱𝗶𝗻𝗴 𝗖𝗵𝗮𝗻𝗴𝗲 | 𝗗𝗕𝗦 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝗶𝗲𝘀 Four state-owned shareholders have listed a combined 40% of DBS Securities (China) for sale on the Shanghai United Assets and Equity Exchange. The 19.83% and 20.17% stakes have a listing price of RMB408m and RMB415m, respectively. 💡 𝗜𝗻𝗱𝗲𝘅𝗶𝗻𝗴 | 𝗦𝗦𝗘 Shanghai Stock Exchange is launching the SSE STAR 200 index on August 20 to track liquid small-caps listed on the STAR Market. This new index accompanies existing STAR 50 and STAR 100 indices. 💡 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝗶𝗲𝘀 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 | 𝗧𝗮𝗹𝗲𝗻𝘁 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 There has been an increase in the number of senior managers from securities companies leaving to join the private fund industry. Several have joined existing firms, while others have established their own private fund management entities.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Once again, it was an environment where external commentators set expectations which were never going to be met. In the weeks ahead of the Chinese Third Plenum, Western media coverage contained varied opinions as to what Beijing decision makers should do. Of course, the priority pushed by these commentators remained fixated on an announced fiscal stimulus. Recall though, Keynes is dead in China and with that such calls should have never been made. The conclave ended with high level, directionally prudent policies all light on details (very consistent). This is what should have been expected in the first place. This is always how such events play out. Details are never forthcoming, as Peter Alexander, back from a very well-deserved holiday, addresses in this latest video. Link to the video can be found here https://lnkd.in/g9KUsJJu

Today’s China Top Five: 💡 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱𝘀 | 𝗤𝘂𝗮𝗿𝘁𝗲𝗿𝗹𝘆 𝗥𝗲𝘀𝘂𝗹𝘁𝘀 Onshore mutual fund AUM reached RMB30.7tr in 2Q24 – a QoQ increase of 6.5% - largely driven by strong flows into bond funds. MMFs, QDII, and REITs also saw net inflows over the quarter. 💡 𝗕𝗿𝗼𝗸𝗲𝗿𝗮𝗴𝗲 | 𝗕𝗡𝗣 𝗣𝗮𝗿𝗶𝗯𝗮𝘀 BNP Paribas Securities (China) was officially established, becoming the fourth foreign-owned securities firm in China. Registered capital stands at RMB1.1bn. 💡 𝗘𝗰𝗼𝗻𝗼𝗺𝘆 | 𝗥𝗮𝘁𝗲 𝗖𝘂𝘁𝘀 PBOC announced it would cut the seven-day reverse repo rate from 1.8% to 1.7%. In addition, commercial banks lowered the one-year loan prime rate (LPR) from 3.45% to 3.35% and the five-year LPR from 3.95% to 3.85%. 💡 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗠𝗮𝗻��𝗴𝗲𝗿𝘀 | 𝗭𝗵𝗼𝗻𝗴𝗴𝗲𝗻𝗴 𝗙𝗠𝗖 Zhonggeng FMC announced that their deputy GM, Qiu Dongrong, resigned on July 19. The fund manager had experienced significant redemptions from equity funds under Qiu’s management after rumors of his departure began circulating in April. 💡 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻 | 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗟𝗮𝘄 China will draft a new comprehensive Financial Services Law, which will place all financial activities under regulatory supervision. The decision was made at the recent Third Plenum.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Today’s China Top Five: 💡 𝗗𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 | 𝗖𝗠𝗕 China Merchants Bank has announced that it will implement a 90% discount to the subscription fees for all mutual funds that it sells – expanding from a small pool of funds it previously offered discounts on. The subscription fee will now stand at 0.15%, in line with that of IFAs and online platforms. 💡 𝗜𝗻𝗯𝗼𝘂𝗻𝗱 | 𝗘𝗮𝘀𝘁𝘀𝗽𝗿𝗶𝗻𝗴, 𝗧𝗿𝗶𝗮𝘁𝗮 Two managers filed China hedge funds with the SEC this week. Eastspring Investments registered the Eastspring China A Shares Growth Fund, to be managed out of Singapore. Meanwhile Hong Kong-based Triata Capital Limited filed the Triata China Equity (Offshore) Fund. 💡 𝗣𝗿𝗲𝗺𝗶𝘂𝗺𝘀 | 𝗔-𝘀𝗵𝗮𝗿𝗲 𝗹𝗶𝘀𝘁𝗲𝗱 𝗶𝗻𝘀𝘂𝗿𝗲𝗿𝘀 The five A-share listed insurance companies achieved a total premium income of around RMB1.8tr. Four of the five (except for New China Life Insurance Co., Ltd.) saw YoY growth, ranging from 2.7% (China Pacific Insurance Company) to 4.7% (PING AN). Both P&C and life insurance premiums saw positive growth overall. 💡 𝗚𝗿𝗲𝗮𝘁𝗲𝗿 𝗖𝗵𝗶𝗻𝗮 | 𝗚𝗔𝗠 GAM Investments has announced a strategic partnership with Sun Hung Kai & Co. Limited in Hong Kong to deepen its distribution footprint in Greater China. Existing funds from GAM with be offered to SHK & Co clients, and there are plans in place for future product launch collaborations. 💡 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗦𝗲𝗿𝘃𝗶𝗰𝗲𝘀 𝗗𝗶𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 | 𝗦𝗢𝗘𝘀 Since the beginning of the year, many SOEs have accelerated the divestment of their equity in financial enterprises to focus on core operations. A recent example includes the listing of shares in Huishang Bank Corporation Limited on the Shanghai United Assets and Equity Exchange by COFCO Group and one of its subsidiaries.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐞𝐞𝐤 – 𝐉𝐮𝐥𝐲 𝟏𝟗, 𝟐𝟎𝟐𝟒 An increase in China-Middle East investment cooperation has been a key theme for 2024. This has included agreements between China Investment Corporation and the likes of Investcorp and Bahrain Mumtalakat Holding Company ("Mumtalakat"), plans to establish an onshore office by Public Investment Fund (PIF) and FII applications from several middle eastern SWFs. The latest development is two Saudi Arabia ETFs onshore (both feeders into a Hong Kong-listed product from CSOP Asset Management) – each of which listed this week. Both ETFs hit the upper 10% trading limit on their first two trading days; the exchange subsequently imposed a one-hour halt at the start of trading on July 18 and added these funds to its watchlist. This is the continuation of a trend we have seen across other outbound products this year. While offshore investment demand is certainly strong, quota shortages have led to and exacerbated the effects of significant retail speculation.

Today’s China Top Five: 💡 𝗡𝗲𝘄 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 | 𝗔𝗹𝗹𝗶𝗮𝗻𝘇 𝗚𝗜 Allianz Global Investors lodged its first onshore mutual fund applications. The two funds include one bond product and one active equity offering. Allianz GI will be the ninth wholly foreign owned fund management company to bring a product to market. 💡 𝗙𝗶𝘅𝗲𝗱 𝗜𝗻𝗰𝗼𝗺𝗲 | 𝗙𝘂𝗻𝗱 𝗠𝗮𝗻𝗮𝗴𝗲𝗿𝘀 The initial batch of 2Q24 fund reports show significant growth in some short-dated bond funds as retail demand remains risk averse. As an example, AUM of the BOC IM Short Term Debt Fund increased by almost 800% QoQ to RMB7.5bn. 💡 𝗘𝗧𝗙𝘀 | 𝗡𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗧𝗲𝗮𝗺 Central Huijin added almost RMB15bn worth of shares in several large-cap ETFs in the second quarter, including CSI 300 trackers from E Fund Management Co.,LTD., Harvest Fund Management and China Asset Management Co., Ltd., as well as an SSE 50 ETF from the latter. 💡 𝗤𝗗𝗜𝗜 | 𝗛𝘂𝗮𝘁𝗮𝗶-𝗣𝗶𝗻𝗲𝗕𝗿𝗶𝗱𝗴𝗲, 𝗦𝗼𝘂𝘁𝗵𝗲𝗿𝗻 The two Saudi Arabia ETFs from Huatai-PineBridge Fund Management Co., Ltd. (Formerly AIG-Huatai) and China Southern Asset Management Co., Ltd. halted trading for one hour at market open after speculative trading led to the 10% upper trading band being hit and significant secondary market premiums on the first two trading days. 💡 𝗜𝗣𝗢 𝗨𝗻𝗱𝗲𝗿𝘄𝗿𝗶𝘁𝗶𝗻𝗴 | 𝗕𝗿𝗼𝗸𝗲𝗿𝘀 The top three brokers by onshore IPO underwriting volume in 1H24 were CITIC Securities Company Limited (RMB26bn), Huatai Securities Co., Ltd. (RMB20bn) and China International Capital Corp (RMB13bn). Volumes for all three fell by more than 60% YoY, while overall IPO fundraising fell by almost 85% from 1H23.   #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews