Hedge Fund Intelligence Hedge Fund Intelligence - China | Page 22

CHINA 2013 ASSET MANAGEMENT companies to choose from in the onshore market, exhaustive research is essential. “The coverage ratio in China is very low compared with Europe, which by definition creates opportunities for investors who can do the necessary due diligence to uncover value,” he says. This means that even long-only strategies have been able to perform strongly ASSET MANAGEMENT CHINA 2013 against the backdrop of a tumbling market, although opportunities have also been expanding recently for short-selling in China. A pilot project allowing for short-selling was launched in August 2012 and extended at the end of February this year, with 11 brokerages now able to borrow stock in 90 listed A-shares with a combined market value of just over nine billion yuan. KEY CHARTS Money market interest rates % 10 9 8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: CEIC, UBS Average seven-day interbank rate Average long bond yield PBC one-year bill rate MIXED OUTLOOK FOR THE SUNSHINE FUNDS Alternative strategies in the onshore market have traditionally been offered by China’s closest equivalent to hedge funds, known locally as sunshine funds – which unlike mutual funds are allowed to maintain unlimited cash positions, and to have up to 30% of their assets in single holdings. Although sunshine funds are able to invest in equities, bonds and listed stock index futures, the majority are long-only equity funds. The minimum investment in these funds, which are targeted principally at high-net-worth individuals, is one million yuan. A key private sector source of data on the evolution of the Chinese private fund industry is the Shenzhen Rongzhi Consultancy Company, which was set up in 2004 and describes itself as the Chunyu Li, president, most rec ??????? ?????????????????????????M??????I???????????????%???????????????????? ????1???????????? ????????? ???????????????????????????????????????????????9?????????????????????????????????????)???????????????????????????????????????????????????? ?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????=?????????????1????????????????????????????????????????????????????????????????????????????????????????????????????????+ ??!???????%??????????((??M???????I?????M???????????(+ ??!???????%??????????()M???????????M???????I???????((0