China’s largest bank, the Industrial and Commercial Bank of China (ICBC), has launched the country’s first India-dedicated publicly offered investment fund, the bank said on Monday.
The fund, named the ICBC Credit Suisse India Market Fund, will “invest in exchange-traded funds listed on more than 20 exchanges in Europe and the US that are based on the Indian market”, according to the state-owned bank, which said it would be “China’s first publicly offered fund for investing in India”.
“It will invest in the future of the Indian economy and track the distribution of the industrial structure across the Indian market,” said Liu Weilin, a fund manager with ICBC Credit Suisse Asset Management Company, in an article in the State-run Global Times.
“Specifically, in terms of the major industries weighted distribution of the index, the financial industry will account for the highest proportion, followed by information technology, alternative consumption, energy, essential consumption, raw materials, medicine, healthcare and other industries,” Liu explained in terms of the sectors that the fund will focus on.
Noting the growing interest among Chinese companies in investing in India, he said, “Recent research indicates that the Indian market has gradually become one of the best-performing markets in the world due to ongoing reforms, macroeconomic improvement and enhanced profitability.”
A number of Chinese tech companies have been investing in and acquiring start-ups in India, led by Alibaba and Tencent.
The Chinese Commerce Ministry said last month that by the end of 2017, Chinese investments into India “added up to more than USD 8 billion”.
“India has become an important market for infrastructure cooperation among Chinese companies and a major investment destination,” spokesperson Gao Feng said. “As two large developing countries and major emerging market economies, China and India both have a huge domestic market. The economies of both countries are highly complementary to each other, creating enormous potential for cooperation.”
The current trade spat with the US-and rising restrictions on Chinese investment there-has led to greater interest in newer markets, said Liu.
“Due to trade friction between China and the US, foreign capital showed mostly net outflows from other Asian stock markets,” he said.
“However, India’s capital inflows reached $2.1 billion, which was in sharp contrast to other markets in the region. This shows that foreign investors recognise India’s economic strength. India is not affected by the trade friction between China and the US, and it has become a safe haven for funds. As the most important emerging market overseas, the Indian stock market’s long-term trend must be positive. For Chinese investors, the current moment offers the best opportunity to get started in Indian stocks.”