Is it a good time to invest abroad?

Mr. Wang, who is holding foreign exchange, finally waited until it was time to buy overseas stocks. There has always been the idea of buying overseas stocks, but due to the lack of legal channels, Mr. Wang can only wait. Facing the upcoming opening of overseas investment and financial management, he is eager to try it out.

At present, foreign exchange holders have no more investment channels besides bank savings, foreign exchange wealth management products, foreign exchange treasure transactions and B-share trading, and the call for opening up overseas investment has long been heard.

Policy Doors Open

The People's Bank of China announced a new foreign exchange management policy on April 13. The new policy has greatly relaxed and simplified restrictions on foreign exchange purchases and investments by domestic institutions and the public. The door for mainland residents to entrust institutions to invest overseas will finally be opened, and domestic residents' investment in overseas capital markets will soon become a reality.

The new policies include allowing commercial banks to use collective wealth management funds to purchase foreign exchange to invest in overseas fixed-income products, allowing securities business institutions such as fund management companies to invest in overseas securities markets with foreign exchange assets, and allowing insurance companies to purchase foreign exchange to invest in overseas currency markets. and fixed income products.

According to the announced policies, in the near future, if domestic residents want to invest in overseas markets, individuals can use their "own foreign exchange" to entrust securities institutions to purchase overseas stocks, funds, etc., or they can transfer their "RMB" through banks. "Funds" are converted into foreign exchange and then invested in overseas fixed-income products. But how it will work is still unclear.

However, in the new policy, the quota for personal foreign exchange purchases directly related to ordinary people has been increased, and the procedures have been simplified. The new policy stipulates that "annual total management" is implemented for the purchase of foreign exchange by domestic residents, and each person can purchase 20,000 US dollars or equivalent foreign exchange per year. For Chinese residents who do not have foreign exchange and only have RMB, if they want to invest in overseas fixed-income products in the future, they can convert RMB into US dollars through legal channels and entrust domestic commercial banks to invest in overseas wealth management products. This is no doubt greatly relaxed compared to the current requirement that one has to take out a passport to buy 6,000 US dollars of foreign exchange.

The specific time is unknown

Guan Tao, deputy director of the General Department of the State Administration of Foreign Exchange, said, "The three investments of banking, securities and insurance can be started, but the specific method has not yet been finalized. As for the specific measures There is no timetable for when it will be introduced."

The market expects that the real release time for institutional overseas investment should be in the second half of the year or near the end of the year.

"We are also waiting for the specific regulations of the Securities Regulatory Commission." A person from the fund company said, "Although they are doing research and preparations in this area, it is still unclear how to do it."

"Bonds Version "QDII First

Immediately after, on April 17, the People's Bank of China, China Banking Regulatory Commission and the State Administration of Foreign Exchange jointly issued the "Interim Measures for the Administration of Commercial Banks' Overseas Wealth Management Business on behalf of Customers", which is actually a specific response to the new policy. refinement.

According to analysis, commercial banks' raising RMB funds and conducting overseas wealth management business mainly have four characteristics: First, customers include domestic institutions and individuals, but referring to the existing RMB wealth management product model, they should be limited to obtaining RMB funds through private placement; second Within the scope of the foreign exchange purchase quota approved by the SAFE, commercial banks will raise and obtain RMB funds for unified foreign exchange settlement; third, the investment varieties are currently limited to overseas fixed-income products; fourth, the wealth management products must be re-settled and paid in RMB after maturity. to customers.

Guotai Junan Securities analyst Lin Zhaohui believes that commercial banks' raising RMB and conducting overseas wealth management and investment business have the nature of QDII (Qualified Domestic Institutional Investors), which is the "bond version" of QDII. The "full version" of QDII has established a basic operating model for the future launch of a "full version" of QDII that can be invested in overseas stock markets. It is expected that the management will launch QDII as soon as possible under the pressure of continued appreciation of the RMB.

Some scholars said that this is an important step in the opening of mainland capital projects, and QDII is only a transitional move. Judging from overseas experience, after the RMB is freely convertible, the mission of QDII will naturally come to an end.

Lin Zhaohui believes that in terms of bank operations, the new business of overseas investment can moderately increase the bank's intermediary business income, but considering the initial development conditions of the business, it is expected that it will not make a significant profit contribution to the overall performance of the bank in the short and medium term; In terms of capital diversion effect, since wealth management products are limited to overseas fixed-income instruments, they will not have a psychological or substantial impact on the domestic stock market, and the diversion impact on the domestic bond market should also be very limited; in terms of monetary policy trends, the launch of new business It is conducive to developing the demand for foreign exchange for capital projects, improving the RMB exchange rate formation mechanism and easing the pressure of appreciation, and at the same time promoting the parity between the interest rate difference between domestic and foreign currencies and the exchange rate.

Is it a good time to invest abroad

Even if the policy door is open, is it a good time to invest abroad?

“Who would be so stupid to change RMB into US dollars and invest overseas?” said Chen Jiwu, Deputy General Manager and Investment Director of Wells Fargo Fund Management Company, “Under the expectation of RMB appreciation, people are crowding their heads and trying to drill in. , the investment enthusiasm of QFII is very high, who will turn RMB assets into foreign exchange assets to invest overseas?” He believes that the implementation of QDII is because China’s foreign exchange reserves are increasing too fast, which relieves the pressure of RMB appreciation. "A compelled measure.

According to the latest data released by the central bank on April 14, China's foreign exchange reserves have reached 875.1 billion US dollars, ranking first in the world. In March, China's foreign trade surplus was as high as 11 billion US dollars. This has also greatly increased the pressure on RMB appreciation.

At the beginning, when QFII was launched in 2002, a person of insight suggested that QDII should be opened up to implement dual channels for capital in and out. However, considering that the A-share market is in the doldrums, if QDII is reopened, it will undoubtedly make matters worse for the A-share market. QDII is put on hold again and again.

This is not what it used to be. Now that the A-share market has been bullish after 4 years of bear market, investment opportunities are gradually emerging. How many people will the opening of QDII attract interest at this time? This also determines how big the QDII will be.

Dr. Teng Tai, Chief Economist of Galaxy Securities, said that there are two reasons why QDII cannot be large-scale. One is the valuation factor. From the perspective of the global market, the valuation of the A-share market is very low. The A-share market is also less risky. When one market is significantly lower than the other, the money in the market will flow to the lower market. Second, exchange rate risk is not easy to grasp.

"From the perspective of diversified investment, if you have foreign exchange, you can also do some overseas investment." said Ye Sheng, senior investment strategist at Xiangcai ABN AMRO Fund Company, "As a defense requirement, do not focus investment in one market. There are also many excellent companies in the United States with relatively stable performance growth. If you can hold their stocks, you can generally get a stable return.”

The scale of QDII is relatively small

The latest statistics show that the investment quota of QFII exceeds 6 billion USD, according to the principle of reciprocity, the QDII investment quota released this time should be similar to this figure.

“When QDII was first launched, it would first be a pilot project, and then the supervision would be relatively strict, and the investment quota would be controlled more tightly. Several factors determined that the initial investment quota of QDII would be relatively small.” analysts said.

Goldman Sachs, an international investment bank, estimates that the first batch of QDII funds to be invested overseas will be only US$1 billion to US$3 billion. Credit Suisse Group expects that at the initial stage of the implementation of the measures, about 4 billion to 6 billion US dollars of funds will flow to the international financial market in the next 3 to 4 months, including the bonds of the seven industrialized countries and the Hong Kong stock market. This year, the funds involved in using QDII to invest overseas will reach US$10 billion to US$12 billion. From the perspective of buffering the pressure of RMB appreciation, even if it is equivalent to the QFII quota, this amount of funds has a very limited effect.

The research report released by Deutsche Bank said that the biggest beneficiaries of QDII are Chinese stocks listed in Hong Kong, including oil stocks, telecom stocks and financial institutions stocks. International investment bankers believe that corporate bonds and real estate bonds in developed stock markets such as Europe and the United States have reached historical highs relative to government bonds, but their appeal is limited. If you have to choose, QDII will be more inclined to invest in the Hong Kong stock market. Two types of stocks are the most optimistic about QDII, one is companies listed in Hong Kong but unlisted in mainland China, such as banks, insurance and other stocks; the other is companies with both A and H shares listed, and the price difference between A and H shares is Big companies are the most attractive.

Risks cannot be avoided

Opening QDII also means risks. For example, if you exchange RMB for USD and invest overseas, if you buy US Treasury bills, the return of 4% is higher than that in China, but if the RMB appreciates by 5%, it may not be as good as 2% in domestic investment.

Some scholars pointed out that it seems that the nominal rate of return of investing overseas is high, but the actual rate of return is not high under the expectation of RMB appreciation, and it may take a lot of risks. In addition, there are problems of unfamiliarity with overseas markets and relatively high transaction costs when going out to invest. Chinese financial institutions lack experience in international capital markets and are unfamiliar with foreign markets, so it is not easy to make money by investing.

Many domestic fund companies admit that they are not well-prepared for overseas investment, and the business capabilities of their existing staff cannot meet the needs of overseas investment, and they must rely on cooperation with overseas institutions to conduct overseas investment.

There are also people in the securities industry who worry that the opening of QDII may provide an opportunity for foreign funds to withdraw from the Hong Kong market. "QDII must not receive the last stick."