Join NexChange - the professional
network for the financial services
industry - and receive a free one-
year subscription to Forbes
Chinese use apps to diversify investments
Apps are rapidly changing the investment habits of ordinary Chinese, opening up alternative markets to diversify their portfolios. This is especially important after last year’s wild gyrations in domestic share prices as well as the continued slide in the renminbi.
The apps are targeted at modest investors, mainly because tight capital controls restrict individual annual outflows to $50,000, says The Wall Street Journal. (paywall)
The new apps, which essentially put mini U.S. brokerages in Chinese smartphones, are the latest in a wave of innovations transforming China’s financial markets and upending traditional banking here. The stock-purchase apps are opening a path to U.S. financial markets for the Chinese middle class, which is seeking profitable places to put money.
The JimuStock service, started in December, provides access to U.S. equities and online brokerage startup Tiger Brokers opened a similar platform in July for Chinese to invest in New York-listed stocks. Hong Kong-based Futu Securities, partly backed by Tencent Holdings, does the same with its Niuniu app.
At stake is a reservoir of Chinese personal investible assets set to grow to 196 trillion yuan ($31 trillion) by the end of 2020 from the current 110 trillion yuan, according to estimates from the Boston Consulting Group.
Of course there is a risk for these pioneers: regulators might get spooked if capital outflows accelerate sharply.