Asia-Pacific

Implications from China's Bond and Equity Index Inclusion

_{Posted on Feb 18, 2019}

Record US$120bn inflows into the Chinese bond and equity market were seen in 2018, which has acted as an important supporter to its balance of payments given the current account weakened. In 2019, Citi analysts expect combined bonds and equities inflows could reach ~US$200bn, a positive factor for asset prices.

Equity

China onshore equity market witnessed strong foreign inflows over the past year, motivated by A-share inclusion in MSCI global indexes for the first time in history. Northbound net purchase reached over US$45bn in 2018, representing 45% yoy growth from 2017.

Citi analysts expect 2019 to be another milestone of A-share globalization, with significant acceleration in global index inclusion. Citi expects both MSCI and FTSE to include A-shares at a substantially faster pace, which could bring up to US$100bn foreign inflows in the onshore equity market. The full inclusion by MSCI and FTSE by 2025E could generate US$70-100bn annual inflows and bring the foreign ownership of A-shares to 8%.

Bonds

For 2019, Bloomberg-Barclays Global Aggregate Index confirmed to start its China inclusion from April. Thus, passive inflows from index investors could become a new driver of bond inflows. Citi analysts expect US$110-130bn total bond inflows for 2019E.

Eventual full inclusion by three bond indices can bring in ~US$300bn passive inflows. Citi analysts expect US$500bn bond inflows in the next five years, lifting foreign ownerships of Chinese government bonds (CGBs) and policy bank notes to 20% and 5% by 2023E.

_{By Citi Global Wealth Investments | Mar 18, 2024}

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Markets see a busy week with 10 central bank meetings this week. Our Head of FX Strategy brings our focus to 3 central bank meetings that markets highly anticipate.

_{By Citi Global Wealth Investments | Mar 14, 2024}

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After decades of poor economic performance, Japan now sees wage growth, inflation, and avoided a technical recession. Are we finally seeing the light at the end of the tunnel for Japan? This week, our Global Head of FX Strategy analyzes the situation for the Yen and compare the differences in central bank policy between Japan and the US.

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_{By Citi Global Wealth Investments | Mar 7, 2024}

Weekly FX Focus - NZDCHF: NZ Rates Higher For Longer, SNB Poised to Cut

The Reserve Bank of New Zealand made an unexpected decision to keep rates unchanged last week. Meanwhile, the Swiss National Bank is expected to cut rates. This week, we examine the circumstances of both economies and discover how NZD could benefit.

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Singapore: This communication is distributed in Singapore by Citibank Singapore Limited (“CSL”) to selected Citigold/Citigold Private Clients. CSL provides no independent research or analysis of the substance or in preparation of this communication. Please contact your Citigold/Citigold Private Client Relationship Manager in CSL if you have any queries on or any matters arising from or in connection with this communication. Investment products are not insured under
the provisions of the Deposit Insurance and Policy Owners’ Protection Schemes Act of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme.

This communication is for general information only and should not be relied upon as financial advice. The information herein has no regard to the specific objectives, financial situation and particular needs of any specific person and is not intended to be an exhaustive discussion of the strategies or concepts mentioned herein or tax or legal advice. Any person interested in the strategies or concepts mentioned herein should consult their independent tax, legal, financial or other advisors,
as appropriate. This communication does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom
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Before making any investment, each investor must obtain the investment offering materials, which include a description of the risks, fees and expenses and the performance history, if any, which may be considered in connection with making
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with the investment and make a determination based upon the investor’s own particular circumstances, that the investment is consistent with the investor’s investment objectives and assess whether the investment product is suitable for
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CSL does not provide discretionary portfolio management services.

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Citibank N.A. UAE is registered with Central Bank of UAE under license numbers BSD/504/83 for Al Wasl Branch Dubai, 13/184/2019 for Mall of the Emirates Branch Dubai, BSD/2819/9 for Sharjah Branch, and BSD/692/83 for Abu Dhabi Branch.

This is not an official statement of Citigroup Inc. and may not reflect all of your investments with or made through Citibank. For an accurate record of your accounts and transactions, please consult your official statement. Before making any investment, each investor must obtain the investment offering materials, which include a description of the risks, fees and expenses and the performance history, if any, which may be considered in connection with making an investment decision. Each investor should carefully consider the risks associated with the investment and make a determination based upon the investor’s own particular circumstances, that the investment is consistent with the investor’s investment objectives.
At any time, Citigroup companies may compensate affiliates and their representatives for providing products and services to clients.

United Kingdom: This document is distributed in the U.K. by Citibank UK Limited and in Jersey by Citibank N.A., Jersey Branch.

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is a company limited by shares registered in England and Wales with registered address at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, Companies House Registration No. 11283101.

Citibank N.A., Jersey Branch is regulated by the Jersey Financial Services Commission. Citi International Personal Bank is registered in Jersey as a business name of Citibank N.A. The address of Citibank N.A., Jersey Branch is P.O. Box 104, 38 Esplanade, St Helier, Jersey JE4 8QB. Citibank N.A. is incorporated with limited liability in the USA. Head office: 399 Park Avenue, New York, NY 10043, USA.

DISCLAIMER [+]

Market Outlook

Asset Classes

Regions

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