Morgan Stanley to expand China team as stock market reforms take hold
Investment bank to beef up research on A-share listings ahead of new Shenzhen stock connect scheme as reforms set to boost foreign access
US investment bank Morgan Stanley plans to add dozens of new jobs to its China-focused equity research and corporate analysis teams over the coming year as Beijing moves to give foreign investors more direct access to mainland stock markets.
The plan to link the stock exchanges of Hong Kong and Shenzhen, flagged earlier this month by Premier Li Keqiang, will give foreign investors a pool of about 2,000 equities to choose from - roughly triple the number currently available through the Shanghai-Hong Kong Stock Connect scheme.
"It changes the scale of what you can do in China in terms of putting capital to work," Gokul Laroia, co-chief executive of Morgan Stanley Asia Pacific told the South China Morning Post.
"With these companies little is known about their management teams, or about their business models," Laroia said. "We are investing in research, investing in corporate access to be in a position to offer great content to our clients and come up with ideas."
Morgan Stanley's mainland-focused equity analysts in Hong Kong write research on about 100 A-share companies, about 60 of which also have H-share listings in the city.
Laroia, who also heads the bank's pan-Asia equity business, plans to boost research coverage of A shares to about 200 firms over the coming 12 months, expanding staff in traditional research and its more granular "corporate access" service - investor roadshows, conferences and management site visits to target companies.
Adding Shenzhen to the existing link between Shanghai and Hong Kong is the next step in Beijing's plan to allow freer access to its roughly US$4.5 trillion stock markets.