J.P. Morgan: Chinese A-shares market to attract $150 bln inflow in a year
J.P. Morgan expects 150 billion U.S. dollars inflows to A-shares in the May 2019 to March 2020 period, an executive of the bank said Tuesday.
"Chinese market offers attractive opportunities to foreign investors," said Jing Ulrich, managing director and vice chair of Asia Pacific of J.P. Morgan.
MSCI announced in March that it would raise the weight of China's A-shares from five percent to 20 percent. J.P. Morgan expects the move will bring 85 billion U.S. dollars in capital inflows to China's A-share market. FTSE Russell announced earlier that it will include A-shares in its index system from June 2019. J.P. Morgan expects the combined adjustments to bring in a total of 150 billion U.S. dollars inflows to A-shares.
The Renminbi-denominated Chinese government bonds and policy bank bonds will be included in the Bloomberg Barclays Global Composite Bond Index from April 2019 and will be completed step by step within 20 months.
Ulrich said the move indicates that China will continue to strengthen and open its capital markets, at the same time increasing its appeal to more international investors.
Ulrich said the bank is optimistic about the Science and Technology Innovation Board for its role in promoting technological innovation and market-oriented reform of the capital market. The board will adopt a registered IPO system, which will be more market-driven compared with the current audit system.
Ulrich added that the bank believes that there will be no major changes in monetary policy in the near future. She said that the two trillion yuan (298 billion U.S. dollars) tax and fee reduction will help improve the business environment and profitability of the company and help restore confidence in investment and consumption.
J.P. Morgan forecast the Chinese economy will expand 6.4 percent this year. The country's GDP will reach 29 trillion U.S. dollars in 2030, about 90 percent of the size of the U.S. GDP.
Ulrich made the remarks when meeting the press before the J.P. Morgan Chase's China summit, which runs in Beijing from May 8-9.