It is perhaps no small coincidence that China’s stock market has also experienced significant growth in size in recent years. As illustrated below, while the US equity market is still the largest in the world by a wide margin, China’s equity market has grown at a significant pace over the past 10 years. As a result, as of the end of December 2013, China had become the second largest equity market, as measured by market value.
Source: London Stock Exchange, HKX, WFE, Wind, FTSE Group; data as at 31 December 2013
Several factors would point to the expected continued interest in China and the growth in equity listings over the coming years. First, although China’s pace of growth is slowing, IMF growth rate projections are still larger for China than other developed markets. Following 15 months of restrictions on IPOs, 2014 has seen a steady number of listings on the mainland, with a strong pipeline estimated to be just under 600 applications in the mid-year. In addition, high profile China N-share listings such as Alibaba and JD.com have attracted significant investor attention around the globe. Growth in the allocation of QFII and RQFII remains strong with $114 billion approved at the end of November. Finally, last month’s much anticipated debut of the Shanghai-Hong Kong Stock Connect program marked an historic step towards opening Chinese capital markets to international investors.
Such developments suggest that the country that has grown to be the world’s largest economy should continue to open up its markets and potentially attract new investors. That will in turn encourage the further development of its equity markets.
As the leading international index provider of Chinese indexes, FTSE has been a part of this remarkable evolution since the beginning of this century. FTSE has since been providing Chinese domestic and international indexes to global and domestic investors. The two flagship FTSE China indexes– the FTSE China 50 Index and FTSE China A50 Index – were designed to provide tools to investors with and without access to the domestic Chinese market. As of December 5, 2014, ETFs and funds tracking the FTSE China A50 Index had assets under management of $15 billion and there was a total of $24 billion tracking the FTSE China Index Series.
© 2015 London Stock Exchange Group companies.
London Stock Exchange Group companies includes FTSE International Limited (“FTSE”), Frank Russell Company (“Russell”), MTS Next Limited (“MTS”), and FTSE TMX Global Debt Capital Markets Inc (“FTSE TMX”). All rights reserved.
“FTSE®”, “Russell®”, “MTS®”, “FTSE TMX®” and “FTSE Russell” and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under license.
All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication.
Neither the London Stock Exchange Group companies nor any of their licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the FTSE Russell Indexes for any particular purpose to which they might be put.
The London Stock Exchange Group companies do not provide investment advice and nothing in this communication should be taken as constituting financial or investment advice. The London Stock Exchange Group companies make no representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the London Stock Exchange Group companies. Distribution of the London Stock Exchange Group companies’ index values and the use of their indexes to create financial products require a license with FTSE, FTSE TMX, MTS and/or Russell and/or its licensors.
Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back-tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.