14th May 2019

Credit Suisse hosts the 6th China A-shares Conference in Shenzhen

Credit Suisse hosted the 6th China A-shares Conference in Shenzhen. The two-day conference presented 50 leading A-share listed companies, with a total market capitalisation of over RMB2.7trn, to 200 top institutional investors from the region. This annual event is dedicated to exploring developments in the China A-share market.

Vincent Chan, Head of China Equity Strategy Research at Credit Suisse, said: "The move by global index providers to accelerate the inclusion of A-shares to benchmark indices is an acknowledgement of the progress China is making with its reforms and opening up its capital market. It is also indicative of the growing interest of overseas investors in A-share allocation."

Credit Suisse estimates that the MSCI inclusion alone could attract inflows of in the region of US$50bn in fresh foreign capital to the Chinese domestic market this year. As of end-2018, foreign investment in the A-share market reached RMB1.2trn, doubling its size from 2016, and constituting 7 per cent of the A-share free-float market capitalisation.

"It took the Korea and Taiwan markets seven and ten years, respectively, to reach a 100 per cent inclusion weighting. Judging from the China Securities Regulatory Commission (CSRC)'s stance of deepening the country's capital market reforms, we believe the China A-share's full inclusion may come at a faster pace than expected," Mr Chan added.

As a leading broker in Asia Pacific, Credit Suisse has a strong Equities franchise across Sales, Trading and Research in the region. Through its securities joint venture in China – Credit Suisse Founder Securities (CSFS) – Credit Suisse is one of the very few global banks that can offer direct access to the China onshore equity markets. Last month, Credit Suisse announced plans to increase its shareholding in CSFS to a 51 per cent controlling stake.

Credit Suisse is also expanding its footprint in electronic trading in China. Through a partnership with CSFS, the bank is rolling out its Advanced Execution Services (AES) platform to the domestic China market. The AES platform enables Chinese onshore and foreign institutional investors to trade China A-shares, using the same recognized algorithms as international investors use for trading A-shares via Stock Connect.

Credit Suisse has one of the most comprehensive and highly recognised China Research coverage capabilities. The Credit Suisse Equity Research team covers over 430 Chinese-listed stocks, including about 160 domestic A-shares, which represent over 70 per cent of the CSI-300 index constituents by market capitalization. In addition, the HOLT platform also covers close to 1,900 A-share companies and more than 2,850 stocks across Hong Kong and mainland China.