InvestorQ : How active have Chinese investors been in the global equity investing and are the Indian government fears of Chinese investments justified?
Aditi Sharma made post

How active have Chinese investors been in the global equity investing and are the Indian government fears of Chinese investments justified?

Answer
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Aashna Tripathi answered.
3 months ago


To be realistic, Indian government fears about the preponderance of Chinese investments are not entirely unfounded. For example, firms in China brought in nearly 50% of the equity capital globally issued during the year. This is a record of sorts and points to the preponderance of the Chinese investors in global investment market place.

In terms of raising of fresh money in the equity markets, China-based companies sold shares worth $32 billion between January and June 2020 while the US managed only $15.8 billion. China accounted for 49% of all the funds raised in the first half. In short, Chinese investors are lapping up global shares and China is taking away a big slice of global liquidity.

There are two major arms of the Chinese capital market to raise funds. The first is the now famous STAR Market while the other is the well-oiled IPO market in Hong Kong. HK Investors also have a massive appetite as was seen in the success of the recent mega public issues like the $3.9 billion raised by ecommerce giant JD.com and $3.1 billion by Net Ease.

The US has been trying to ease Chinese companies out of the US and that is forcing greater action in the Chinese and Hong Kong markets. With rising tensions with the US, China is looking to conduct more of its capital market focus closer home. There are more Chinese companies like Yum China Holdings and ZTO Express also in the fray.

It looks like the US markets closing its doors to China is boosting Chinese markets.