China’s market push and pull highlights tensions in opening up _ afr. com

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China’s recent policy of opening its markets to foreigners is expected to continue this year, but there are questions about how meaningful the change will be amid a clampdown on money leaving the country.

While China loosened restrictions on its interbank bond market and relaxed rules for offshore investors trading stocks, it also saw $US762 billion ($1.04 billion) head overseas in the first 11 months of last year, according to Bloomberg Intelligence estimates, as investors sought safety in foreign assets. Futures in the stock market That helped push the yuan down 6.5 per cent against the dollar in 2016, the most since 1994. Usd to aed converter Seeking to stem the flow, mainland authorities tightened rules that contributed to MSCI refusing to add Chinese-listed shares to its global indexes.

China’s regulators have indicated that this year foreigners might be allowed to access commodity futures and bond derivatives, while MSCI will again consider adding mainland stocks. Current binary samsung official But concerns remain about how open China’s markets will be, especially on the issue of taking assets out of the country. Binary code destiny The contrast highlights the tension authorities face between inviting more investment while keeping control of the financial sector.


“I’d describe China’s strategy as a pipeline strategy. Stock market trading hours central time Essentially what they do is to create various pipelines of inflows and outflows,” said John Greenwood, London-based chief economist at Invesco Asset Management. Inr to usd conversion rate “The problem is the flows are always in the opposite direction of what they want.”

“We have already seen in China’s case, markets only work when they go up. Exchange rate hkd to usd You are not allowed to go down,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. Understanding binary “If we do get any reforms this year, they are going to be Potemkin reforms. Euro today The veneer will look like they are moving to a market economy, and the reality will be anything but.”

China has studied possible scenarios for the yuan and capital outflows this year and is preparing contingency plans, Bloomberg News reported, citing people familiar with the matter. 100 usd to euro Financial regulators have already encouraged some state-owned enterprises to sell foreign currency and may order them to temporarily convert some holdings into yuan under the current account if necessary, according to the report.

Concerns about the difficulty in taking assets out of the country were one of the reasons stated by MSCI in June when it declined, for the third straight year, to add China’s domestic stocks to its benchmark indexes. Euro to usd forecast The decision was a blow to China’s hopes for better integration into the global financial system and came at a time when it needs funds to stabilise its currency. Free pictures to color Analysts have estimated that inclusion could mean as much as $US30 billion of inflows from foreign fund managers.

The Shenzhen-Hong Kong link, which was accompanied by the removal of total aggregate quotas – though daily quotas remain – is one way China is addressing the trading difficulties flagged by MSCI.

“Asset returns in China have been, and will be, declining amid the slowdown in economic growth,” said Chen Yalong, a Shanghai-based strategist with Northeast Securities Co. Euro to inr conversion rate today “So the opportunities for foreign investors would be structural.”

The Shanghai Composite Index will climb to 3,800 by the end of the year, a 22 per cent gain, according to the median forecast in a Bloomberg poll of 12 strategists and fund managers. American futures market A stabilising economy, faster spending on infrastructure and recovering earnings growth were among factors seen driving gains in the nation’s shares, the survey showed.

Those hoping to benefit from that growth should enjoy this year’s expected easing of restrictions, though it may be some time before China’s markets are fully open.

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