Chinese banks are expected to allocate more funds raised via the issuance of wealth management products (WMP) to equity investments.
Wang Yifeng (王一峰), chief financial sector analyst at Everbright Securities, said to China Securities Journal that he expects the wealth management subsidiaries of Chinese banks to continue to expand their assets under management as well as raise the percentage of equity investments, which will continue to drive an increase in funds for China’s capital markets.
“Given current constraints in terms of investment research shortcomings, in future [bank] wealth management subsidiaries will expand cooperation with other asset management institutions, strengthening their equity asset investment capability.”
Data from the China Banking and Insurance Regulatory Commission (CBIRC) indicates that as of the end of June bank WMP equity investment allocations totalled 790.7 billion yuan (approx. USD$120.6 billion), with between 20 – 70% of mixed WMP’s allocated towards equities.