QFII impact on A shares not major
By Winny Wang |
May 27, 2010, Thursday
|
Print Edition
Print Edition
QUALIFIED foreign investors trading stock index futures may not impact hugely the A-share market because of their small quotas, analysts said.
China allowed foreign investors under the Qualified Foreign Institutional Investor scheme to trade stock index futures, according to agreements reached at the second meeting of the United States-China Strategic & Economic Dialogue in Beijing.
The move will enable QFII investors such as Invesco to hedge risks and compete more effectively with local asset mangers.
"QFII's quotas to invest in the equity market are comparatively small, so their trading of index futures won't greatly influence the market," said Gao Zijian, a financial derivatives analyst at Orient Securities Co.
Two analysts doubted that the index futures traded in China will attract QFIIs.
"It's still unclear whether QFII investors will be interested in China's index futures as they are skilled at hedging risks trading international financial derivatives," said Zhao Jingjing, an analyst at Essence Futures.
A total of 88 firms got QFII quotas exceeding US$17 billion by the end of March, said the State Administration of Foreign Exchange.
"Compared with index futures in overseas markets, China's market is still immature, so it's hard to say whether the product in China will attract QFII to hedge risks," said Yin Jianfeng, an analyst at Chinese Academy of Social Sciences.
The index futures were launched on April 16. Investors bet on the direction of domestic stock markets based on the CSI 300 index, hedging their positions. The index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges, has fallen 20 percent since then.
China allowed foreign investors under the Qualified Foreign Institutional Investor scheme to trade stock index futures, according to agreements reached at the second meeting of the United States-China Strategic & Economic Dialogue in Beijing.
The move will enable QFII investors such as Invesco to hedge risks and compete more effectively with local asset mangers.
"QFII's quotas to invest in the equity market are comparatively small, so their trading of index futures won't greatly influence the market," said Gao Zijian, a financial derivatives analyst at Orient Securities Co.
Two analysts doubted that the index futures traded in China will attract QFIIs.
"It's still unclear whether QFII investors will be interested in China's index futures as they are skilled at hedging risks trading international financial derivatives," said Zhao Jingjing, an analyst at Essence Futures.
A total of 88 firms got QFII quotas exceeding US$17 billion by the end of March, said the State Administration of Foreign Exchange.
"Compared with index futures in overseas markets, China's market is still immature, so it's hard to say whether the product in China will attract QFII to hedge risks," said Yin Jianfeng, an analyst at Chinese Academy of Social Sciences.
The index futures were launched on April 16. Investors bet on the direction of domestic stock markets based on the CSI 300 index, hedging their positions. The index, which tracks the 300 biggest stocks on the Shanghai and Shenzhen exchanges, has fallen 20 percent since then.
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