Overall: Best research house for BRI 2018
HSBC Global Research has more than 350 analysts around the world, focusing on global emerging markets and Asia, and in recent years examining key BRI investment themes along the Silk Road.
Under Gordon French, head of global banking and markets, Asia Pacific, HSBC continues its focus on its core competence in terms of being the go-to bank globally for Asian expertise. Its global research team has been writing about BRI investment themes since Beijing first announced the initiative.
While much of the BRI research effort has been specific to China and other key emerging markets along the Eurasian landmass, HSBC has also incorporated BRI themes into its broader analysis of Asia’s infrastructure investment boom, especially in south and southeast Asia.
For instance, in May last year the bank did a landmark study on BRI’s impact on the Association of Southeast Asian Nations region. The report concluded that Asean is set to benefit from plans for nearly $80 billion of Chinese-funded projects, and that if the majority of these projects materialize, they could have a sizeable impact on growth in Malaysia, the Philippines, and Indonesia in particular. It also concluded that investment flows will support the balance of payments into the region.
In January this year, the bank did a landmark study laying out the argument that BRI can only succeed if the strategy implements green or environmentally friendly projects.
“Infrastructure should be designed to last,” the study said. “Climate resilience is important as evidenced by the extreme events of the past year, where Munich Re expects insured losses to be the highest ever. At the same time, we think infrastructure should be built in a way that avoids carbon lock-in. Since these structures and systems will maintain their emissions profile for decades, their emissions should be low, in our view.”
The research pointed out that the UN’s sustainable development goals are also giving new direction to financiers as they fund large infrastructure projects and that Chinese authorities must be fully cognizant of this fact.
In November last year, the bank concluded that the BRI is further impetus for the authorities to continue to liberalize the nation’s financial sector, in a note analyzing newly announced measures that allow foreign financial institutions to own 100% of their China subsidiaries.
The bank recently further strengthened its research capabilities by adding 15 new analysts at its offices in Qianhai, Shenzhen, one of China’s special financial zones that allows both foreigners and Chinese investors to conduct financial transactions as if they were offshore.
The analysts joined HSBC Qianhai Securities, the first Chinese securities joint venture to be majority owned by a foreign bank. They cover a wide range of industries, not only in China, but across the BRI region, including IT hardware, software, healthcare, internet, media, consumer staples and autos.