Last Update: 10:54 PM ET Nov 18, 2007
HONG KONG (MarketWatch) -- The money flowing from China into global equity markets could tally as much as $246 billion next year, with markets in Hong Kong and South Korea expected to benefit the most, according to HSBC Global Research.
"The great wall of Chinese money could be about to arrive," HSBC strategist Garry Evans wrote in a research report Friday.
HSBC says it reached the $246 billion figure using a formula that assumes
Chinese authorities have approved about $40 billion in outflows under the government's qualified domestic institutional investor scheme, comprising allocations granted to banks, mutual funds and insurance companies, HSBC wrote in the report. About $20 billion of those funds have been invested so far, mostly in
To manage the value of its currency,
HSBC said that next year Chinese authorities will likely approve $10 billion in overseas investments to mutual funds each month, while $67 billion will be invested through
Investment in the former British colony should taper off around that mark because of
Some of the remaining $153 billion will head in to
"There are cultural affinities between
Other beneficiaries are likely to include Chinese stocks listed on exchanges such as
Foreign stocks benefiting from Chinese growth in an indirect way, such as Singaporean property group CapitaLand Ltd. and Australian resource firms, are also expected to be targeted by mainland fund managers, the report said.
Evans said many of the
"They felt they needed more to study these markets more extensively before making any investments," Evans wrote in the report.
So far this year, foreign investors have channeled $18 billion into Indian equities, $6 billion into Taiwanese stocks, $3 billion into
Chris Oliver is MarketWatch's Asia bureau chief, based in