Corporate Press Release
Credit Suisse boosts its China A-share Research and Analytical coverage universe ahead of the Shanghai-Hong Kong Stock Connect Launch
HOLT LensTM, an analytical platform proprietary to Credit Suisse, has added more than 300 A-share companies to its database, bringing the total to more than 800 A-share companies. These stocks represent an aggregate market capitalization of US$3.9 trillion. In addition to the CSI 300, HOLT will now provide 100% coverage of all constituent stocks of the Shanghai Stock Exchange 180 and 380 indices, which include the 568 companies that are eligible for the Shanghai-Hong Kong Stock Connect Scheme (“Scheme”).
In addition, Credit Suisse Equity Research has also more than triple its coverage of domestic China A-shares to now include 130 A-share companies, representing a total market capitalization of about US$1.84 trillion. Credit Suisse plans to further expand its Equity Research to cover 300 China A-share stocks by 2016.
Nicole Yuen, Vice Chairman Greater China and Head of Greater China Equities said: “China is an important market for Credit Suisse in the region and we will continue to invest in building the bench of talent and infrastructure to provide best in class products and services to our clients. By expanding the HOLT database and our Equity Research coverage of China’s A-share companies, Credit Suisse aims to offer the leading research product on the A-share market to international investors. Combining our strengths in systematic analytical capability through the HOLT® framework and fundamental analysis through our Equity Research team, Credit Suisse provides the most comprehensive coverage in China A-share markets to international investors.”
Credit Suisse Equity Research provides comprehensive analysis of 1,350 stocks in the region, including 410 Hong Kong and China companies. The HOLT database includes analysis of over 20,000 stocks across 60 countries globally, with 860 companies in Hong Kong. It is made available to more than 5,000 investment professionals at over 750 investment managers.
Credit Suisse is one of the leading equities houses in Asia Pacific by cash turnover, including Hong Kong. It is rated #3 for Asian Equity Research in 2014 by Institutional Investor.
Ernest Fong, Head of Research, Non-Japan Asia said: “The Shanghai-Hong Kong Stock Connect is a signification step forward in the liberalisation of China’s capital account and Renminbi (RMB) internationalisation. The Scheme opens up new investment opportunities for both inbound and outbound investors. As a leading Equity Research house in Asia, we will continue to expand our equity research capabilities in the A-share market, producing insightful analysis that identifies longer term investment themes and opportunities.”
HOLT LensTM: Credit Suisse’s proprietary analytical platform with unique insights
HOLT provides proprietary methodology that objectively measures economic performance and valuation for companies, globally. Delivered via the HOLT LensTM, platform, it provides investors with unique insights into a company's performance, valuation and future expectations.
“One differentiator for Credit Suisse is that we can provide consistent valuation metrics across all sectors and geographies. By using this globally comparable framework for comparing and valuing companies, our clients are equipped to make better investment decisions,” said Jonathan Tischler, Head of HOLT’s business in Asia Pacific.
The scale of China’s capital market
With a total market capitalization of about US$4.2 trillion, the China A-share market is currently ranked #3 globally, accounting for about 6.6% of the world’s market capitalization. China is also the world’s 2nd most actively traded market with average daily turnover of US$59 billion.
A recent Credit Suisse Research Institute (CSRI) report, entitled EM Capital Markets: the road to 2030 , forecasts that China will become the world’s 2nd largest equity market before 2030 and will account for almost one-fifth of the value of global equity markets.
On secondary cash equity activities, the report projects that China A-share market’s average daily traded value to reach US$396.3 billion by 2030, while its share of global traded value to double to 26.9% by 2030, compared to 13.9% this year. CSRI also projects that Hong Kong’s secondary equity annual share traded value is to increase by 8.7 times from currently about US$1.32 trillion in 2013 to US$11.49 trillion. The projected trading values would translate into potential secondary equity revenue opportunity of US$249 billion for China and of US$46.5 billion for Hong Kong cummulatively between 2014 and 2030.*
Vincent Chan, Head of China Equity Research estimates that by the end of 2020, about US$112 billion of the world equity funds will be invested in China A-share market, compared to US$49 billion today.
For a copy of “Emerging capital markets: the Road to 2030,” please click this link .
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*The potential revenue opportunity is calculated by a four basis point average for cash equity commisions. This is based on the assumption that global cash equities commissions stabilize at around 2 – 3 basis points for electronic transactions and 10 – 15 basis points for desk transactions, with an estimated 70%-30% split between electronic and desk transactions.