The days when Australia “rode on the sheep’s back” may be long gone, but agriculture remains a critical component of the economy, generating valuable export income. While overseas investors understand its importance, for most local institutions it’s still a bridge too far.
For several years, investors, from institutional to retail, couldn’t get enough of the tech stocks with all their promises of future growth. But now the market has spoken and it’s saying precisely this – valuations matter again.
Chinese banks, funds focus on Luxembourg for European access
The “cluster effect” of Chinese financial services firms is benefitting Luxembourg as a hub for RMB-based investment in Europe, according to Nicolas Mackel, the country’s Consul General in Shanghai. He is part of a trade mission from Luxembourg to China late this month, which will include Prince Guillaume, Luxembourg’s Hereditary Grand Duke, and Etienne Schneider, the country’s minister for economy and foreign trade.
In an interview with ‘Week in China’ newsletter last week, Mackel says that, of the big Chinese banks, ICBC established itself in Luxembourg in the 1990s and then headquartered its European operations there last year. Bank of China, which has had a presence since 1979, is running most of its European network from Luxembourg. And in August this year, China Construction Bank announced it is setting up its European headquarters in Luxembourg.
Mackel says: “What we’re noticing is that Chinese companies seem more comfortable following in the wake of their peers. This cluster effect has been important in encouraging wider Chinese interest in Luxembourg as a financial centre, as other financial services firms follow the example of the Chinese pioneers. Of course, once the banks are there, Luxembourg also becomes a more obvious location for more of their corporate clientele.”
Nigel Fielding, the chief executive of HSBC in Luxembourg, says: “As a financial hub, Luxembourg is already the world’s leading location for international investment funds, with its UCITS and SIF fund structures now preferred by asset managers around the world… As Chinese banks and asset managers look to market more of their own funds to investors worldwide, we expect Luxembourg to become a preferred jurisdiction for them too, though it’s still early in the process.”
HSBC, which funds ‘Week in China’, has a Luxembourg-domiciled RMB bond fund for investors.
For the full interview, go to: http://www.weekinchina.com/2012/11/open-for-business/?dm
