Financial Services Talking Points | 08-07-2016


In today’s Talking Points: Foreign and joint-venture enterprises now able to register as private securities firms with the Asset Management Association of China opening up investment in Chinese stock markets; Shenzhen Stock Exchange overtakes Shanghai; dramatic increase in fraudulent transactions in Australia; Chinese stocks slide as investors fear further weakening of the yuan and instability in Europe.

Regulators Allow Foreign Companies to Invest in A-Share Markets

The China Securities Regulatory Commission has said that qualified foreign and joint-venture enterprises can be registered as private securities firms with the Asset Management Association of China. Registration with the AMAC means that a firm gets a license to invest in Chinese stock markets. A spokesman for the CSRC said, “The new move can attract more excellent asset management institutions from abroad to enter the Chinese market and thus diversify participants in the capital market”. The Asset Management Association of China requires qualified private securities firms registered to be set up in China also be approved by the financial regulators in their countries or regions of origin. Jackson Lee, of asset management company Fidelity International, said “We are pleased to hear this piece of good news and would like to increase investment exposure in China.”

Source: China Daily


Shenzhen Stock Exchange Turnover Volume Exceeds that of Shanghai

Shenzhen’s nascent stock exchange is coming to rival Shanghai’s, as for the first time in at least a decade, Shanghai’s bourse lost its position as the nation’s leading trading venue. Shenzhen is home to many of China’s newer and more dynamic companies less affected by the recent slowdown in the stock market. Companies listed on its stock exchange include makers of lithium batteries, organic light emitting diodes and e-commerce firms. “In the short term, the trend may not last,” says Fu Jingtao of the brokerage Shenway Hongyuan Group. “In the longer cycle, the hope remains that the new economy will be the future of trading.”

Source: Bloomberg


Financial crime ‘on the rise’: AUSTRAC

According to the Australian Transaction Reports and Analysis Centre (AUSTRAC), financial crime is on the rise in Australia, witnessing a dramatic increase in fraudulent transactions. The deputy chief executive of AUSTRAC, Gavin McCairns, states that the rise in new technology such as ‘blockchain’ is transforming the financial sector. He also explains that as the financial sector is growing increasingly complex, “the opportunities are expanding to use concealed methods to move illicit funds, either through complex financial structures or exploiting loopholes”. It has also been reported that cyber crime in Australia is at a much higher rate than the rest of the world. Furthermore, the chief executive of the Australian Digital Currency and Commerce Association (ADCCA), Nick Giurietto suggests that Australia needs to provide clearer guidelines for the growing companies now operating in the financial technology sector.



China stocks caught in tug-of-war between weak yuan and stimulus hopes, HK up

Stocks in China slid on Thursday as investors fear the further weakening of the yuan and instability in Europe — one of the country’s biggest export markets. Since Brexit, the yuan has fallen about 1.6 percent, and although the currency has steadied this last week, it is believed by traders and analysts that the central bank will allow it to continue falling to support struggling exporters. Despite the outstanding non-performing loans in China’s banking sector exceeding two trillion yuan mark at the end of May, some investors are believed to be buying on the dips because of recent data suggesting the economy is in need of more government support. According to Xiao Shijun, an analyst at Guodu Securities in Beijing, the A shares have room to increase after consolidations due to “expectations of loosening monetary policy, reforms, and the launch of Shenzhen-Hong Kong stock connect.” He also adds that it is expected that the market is to rise another 10-15 percent within the next 1-2 months.

Source: CNBC