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February 1, 2018 | Global Equity
The Great Awakening

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

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The recent opening of the Chinese equity markets to foreign investors presents a notable investment opportunity.

At the end of 2016, China allowed, for the first time in a meaningful way, the flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect.

The Shenzhen-Hong Kong Stock Connect is an investment channel that connects the Shenzhen Stock Exchange and the Hong Kong Stock Exchange. Under this program, investors in each market are able to trade shares on the other market using their local brokers and clearing houses.

The flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect opens the possibility of investing in a nearly $10 trillion market.

In practice, the flow of investment dollars into domestically listed Shenzhen stocks through the Shenzhen-Hong Kong Stock Connect opens the possibility of investing in a nearly $10 trillion market. Foreign investors can now access rapidly growing parts of the Chinese economy that were not previously accessible.

These opportunities span sectors—IT, capital goods, materials, consumers, real estate, and healthcare, among others, as the chart below illustrates.

The opportunity here is vast, not just in size but in opportunity for active managers, because most of these companies are not well covered. Active managers with experience in China A shares will have a rare opportunity to seek potential winners in the most exciting growth jurisdiction available today.

 

Global Equity Strategist

Olga Bitel, partner, is a global strategist. She is responsible for economic research and analysis across all regions and sectors. She distills macroeconomic and geopolitical developments into actionable insights for global equity portfolios within a multifaceted strategic framework. In addition, she provides insights about cyclical turning points and structural trends as inputs into portfolio construction in predominantly bottom-up investment approaches. Before joining William Blair in 2009, Olga was a senior economist at the National Institute of Economic and Social Research in London, United Kingdom, where she produced macroeconomic forecasts for most Asian economies and led thematic research projects for some of the world’s best-known international organizations, including the Organization of the Petroleum Exporting Countries and the International Monetary Fund. Olga received a B.A. from the University of Chicago and an M.Sc. in economics from the London School of Economics and Political Science.

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