News

Chinese regulation will squeeze fund market growth

Risk managementChinese government regulation to reduce risk in financial services is hampering fundraising in the asset management sector. The assessment, from ratings agency Moody’s, highlighted a regulatory clampdown on shadow banking that began in late 2016, “resulting in flat growth or even a decline in the assets under management”. “In the near term, Moody's expects growth to remain tepid as reducing risk in the financial system remains a top government priority in 2018,” said the firm in a statement. Despite the slowdown, analysts at the agency predicted a significant rise in assets over the next decade. Nino Siu, a senior analyst, forecasts an inflow of up to 40 trillion renminbi ($6.3 trillion) over the next ten years into mutual funds and private funds. The agency added that regulatory efforts to control risk would, in time, benefit asset managers by helping to create a stronger financial sector. “The explosive growth of China's asset management industry has increased financial system interconnectedness, as well as liquidity and credit risk, and in that regard we view the regulatory crackdown to reduce these risks as credit positive,” said George Xu, an analyst. ©2018 funds global asia

Executive Interviews

Interview: Money needs a place to go

Mar 11, 2019

Peng Fei, chief investment officer at Wanwei Asset Management, tells Romil Patel about allocating capital across risk factors when asset performance is uncertain and unpredictable.

INTERVIEW: Giving peace a chance

Jan 11, 2019

As US-China tensions escalated in 2018, the leaders of the two economies met in Buenos Aires to agree a truce. Aidan Yao, senior emerging Asia economist at Axa Investment Managers, talks to Romil...

Roundtables

Singapore roundtable: A money magnet

Mar 11, 2019

Our panel discussed why the Singapore Variable Capital Company makes them bullish, what gives the onshore jurisdiction an offshore feel and “blood on the streets” from China’s slowdown. Chaired by Romil Patel in Singapore.

HONG KONG ROUNDTABLE: A sunny picture

Jan 11, 2019

Changes to regulation, US-Sino trade tensions and further steps by China to open its capital markets were some of the topics discussed by our panel. Chaired by Romil Patel in Hong Kong.