As Asia continues to drive global economic growth its capital markets are coming into their own, both as a source of financing and as avenues for investing. The coming decade will mark a period of expansion in cross border investing. Asia and Europe are front and centre.
Underpinning the evolution of Asia’s capital markets is the further assimilation of China into global markets. If the past decade was about the country’s integration into the global supply chain, the next decade will be about its integration into global capital markets. MSCI’s inclusion of A-shares in its emerging market index in step with new investment schemes (CIBM Direct, Stock and Bond Connects) will ensure that China accounts for a bigger portion of the global funds’ investible universe.
China also leads in wealth creation. Together with India, both countries are minting and growing wealth at a fast clip of nearly 10% per year. Asia is home to the highest number of ultra-high net worth individuals in the world, with investable assets set to top US$14.5 trillion by 2020. Entrepreneurship, a booming middle class and rising domestic consumption will buoy long-term growth.
Disposable income growth and emerging affluence are fuelling faster growth in institutional savings. Pension funds, insurers and asset managers are enjoying solid growth as financial sophistication takes root. Insurance premiums written in Asia are set to grow by more than 9% per year over the long term. The region already accounts for a third of total global premium income. Stand by for this to increase: insurance penetration is only just beginning to take off.
Investment mandates are no longer a one-way street. Sovereign wealth funds, pension funds, insurers and asset managers are searching for opportunities beyond home markets. Europe is in the spotlight. As global fund managers look to grow their fund offerings in the region, several Asian fund managers are poised to launch funds into Europe via wrappers such as the Collective Investment in Transferable Securities (UCITS) to appeal to European investors eyeing returns and diversification.
Opportunities in two-way investment between Asia and Europe are growing. London-Shanghai Stock Connect is set for launch later in 2018, providing global investors in the UK with direct access to China’s largest stock market. The reconstituted China Europe International Exchange (CEINEX), a joint venture between Shanghai Stock Exchange, Deutsche Borse Group, and China Financial Futures Exchange, is set to list Qingdao Haier. This will be the first Chinese D-share on the Frankfurt exchange. In June 2018, CEINEX welcomed the launch of Europe’s first China smart beta ETF issued by China Post Global. This added to the 14 ETFs listed so far.
Capitalizing on the success of its two decades of experience in organizing financial market gatherings, The Asset Events is delighted to launch The Asset Asia Bond Markets Summit London edition.
- Evaluating the myriad opportunities available to European debt investors in Asia
- How will Europe benefit from Asian institutional out-bound fixed-income flows?
- Expectations for 2019 international bond issuance by Asian issuers
- Impacts of quantitative tightening and a higher rate scenario on offshore credit spreads
- Are domestic currency bond markets vulnerable to global event-risk?
- What can we expect in the Asian bank capital market in 2019?
- Financing Asian infrastructure: will bond investors rise to the challenge?
- Optimising access channels into China’s domestic bond market
- How are global asset managers making use of Bond Connect and other opportunities?
- Fathoming Chinese credit markets
- Update on legal, regulatory, market infrastructure, and insolvency/bankruptcy codes
- Chinese issuers are among the most active green bond issuers in the world, cementing China as a world leader in this market
- The rest of Asia has emerged onto the scene, with most countries having issued in local and hard currencies including sovereign and agency issuers and corporates from a wide range of industry sector?
- Assessing the outlook for Asian green and sustainable bond issuance