Wednesday, May 6, 2015

What does AIIB represent ? Which sector from China will benefit from AIIB ?

TheAsian Infrastructure Investment Bank(AIIB) is an international financial institution proposed by the government of China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia region. A part of China’s “New Silk Road” Strategy.

Main Goal
Provide access to funds to carry out infrastructural projects across:
• Transportation
• Energy
• Agriculture
• Telecommunications
• Urban development

Reason for AIIB
China is likely to have the most voting power in AIIB
•The Asian Development Bank (ADB) estimates that Asia will need US $8 trillion over the next decade.
•Private investment in infrastructure, according to ADB, hovers at US $13 Billion a year, official development assistance adds another US $11 Billion.
•Short fall exceeds US $700 billion a year.
•Asia has a massive infrastructure funding gap. Click for more info

•AIIB and China’s vision for transnational infrastructure projects, like the Maritime Silk Road, Silk Road Economic Belt and Pakistan-China Economic Corridor.
•Platform for RMB internationalization like IMF and World bank were for USD internationalization.
Click for more info
•Initial subscribed capital to be US$ 50 BLN. Eventually to be US$100 BLN

The One Belt and One Road initiative.
Which sectors and counters on the Shanghai-Hong Kong stock connect will benefits the most?
亚洲基础设施投资银行和一路一带对中国股市有何影响?A股H股的溢价又如何? 
Last traded price as at 28 Apr 2015
Last traded price as at 28 Apr 2015

Source: PSPL & Bloomberg 

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