h country to trade shares listed on the other's stock exchange."The ▓recent new initiatives from the Chinese government to further open up the Chinese capital market are ext▓remely encouraging for global investors, particularly when the global financial markets are clouded at the moment by the risk of the globalization trend rever
sin▓g," said Li of EFG Asset
Management.Agreed Bokobza of Societe Generale. "With freedom for mainland investors to trade offshore and foreign investors to buy mainland shares, principally thanks to the 'connect scheme' in Hon▓g Kong, and soon perhaps via the UK, Chinese shares are extraordinarily liquid."Traded volume as a percent-age of market capitalization is 20 percent▓ in China, and only 8 percent in the US, he
said."China A s▓hares offer an incredible mix of leverage to the country's domestic economy. That's why, we want to buy them for the next decade. More so because we expe
ct China's stocks to stay neutral, largely unaffected, when the ▓next US market crisis occurs. For example, the Shenzhen Composite Index has among the lowest c
orrelations of all major global indices to the S&P500 index at just 8 percent."The ▓expected foreign capital inflows will likely help deepen as ▓well as stabilize
the Chinese capital market, besides fostering a mature and rational investment style among retail investors who have been shortsighted so far."The A-share inclu▓sion in the M
SCI EM Index will also expand the usage of the renminbi and enric▓h the market of financial derivative products rela▓ted to Chinese
securities," said Wei Zhen, ▓director of China research at MSCI Inc.But▓ the greater presence of Chinese securi▓ties in the global financial system will also mean ▓more challenges for international money managers, which will prompt them to review and refine their investment ▓strategies, Wei said."There will be a demand for long-te▓rm experience
and capability of trading the A sha▓res and managing the risks associated with them. Many international institutional investors lack such capability," he said.As for the Chinese bond market, challenges fo▓r foreign invest