There is one piece of asset allocation advice we’ve been giving over and over again since Rayliant launched: The onshore China A shares are a better place to be than the ADRs and Hong Kong listings trading offshore.
There are 136 firms that dual-list in the mainland China A-share market and the Hong Kong H-share market. Of these, 135 are more expensive in mainland China. This article explains why this price discrepancy exists and how investors can take advantage of it.
Contrary to many pundits’ predictions, Jason Hsu is confident that Beijing’s deleveraging efforts will avoid a housing crash in China. The much bigger issue, from both a social welfare and economic perspective, is housing affordability—a crisis he’s seen firsthand during his recent stay in China. This article explains more.
Headlines in the West have been implying Evergrande’s predicted collapse could cripple Chinese banks and create a run on financial institutions. Rayliant Chairman and CIO Jason Hsu explains why differences in China’s real estate development financing make this very unlikely.
Beijing’s announcement of a 3rd new stock exchange may have been surprising, but actually makes sense when viewing from a local perspective.
Philanthropy, taxes, and government assistance programs are new concepts that are top of mind for the Chinese government, signaling a willingness to adopt a more Western approach towards achieving common prosperity.
China’s regulators are focused on those industries and companies with the greatest potential to hurt Chinese society. This means ESG investors who tailor their approach to local social issues —which are often different from “western issues”—can avoid regulatory black swan events and earn better returns.
Rayliant’s Head of Research, Vish Viswanathan, explains why recent market activity suggests that A-shares have less regulatory risk than H-shares and ADRs.
The latest policy decree from Beijing is a likely death sentence for the for-profit education sector in China … but it may be a win for Chinese society. Global investors are sometimes uncomfortable with China’s interventionist approach to address social issues. But if they want to invest successfully in Chinese companies, they’d better understand it.
Is this the end of the road for Chinese ADRs? China may be tightening the VIE loophole that previously permitted U.S. listings of Chinese companies. This article explains why ADRs and VIEs present an especially complicated issue for regulators in China.