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QFIIs get US$2b quota
By Ding Yining |
December 30, 2011, Friday
|
Print Edition
Print Edition
CHINA has granted a total quota of US$1.92 billion for Qualified Foreign Institutional Investor so far this year, with nearly US$1 billion being awarded between October and December after a five-month hiatus as it aims to encourage foreign investment and prevent more capital to flow out.
Seven new QFIIs were each awarded US$100 million and three existing QFIIs, which already had quotas, received US$250 million, according to a latest statement by the State Administration of Foreign Exchange on its website.
This year's quota was the lowest since 2007, and 40 percent lower from that of last year.
The unstable international market environment has prompted some QFIIs to withdraw capital from China which saw foreign direct investment fall 9.8 percent annually in November to US$8.8 billion - the first time in more than two years that foreign funds had left the market.
The People's Bank of China said last week it has approved the branches of 12 Hong Kong brokerages to run yuan-denominated fund management business under the trial Renminbi Qualified Foreign Institutional Investor scheme.
"These new moves, including the newly granted quotas since October, is a clear sign that regulators want to guide the inflow of capital to boost the confidence of the capital market," GF Securities' analyst Zhen Wenqi wrote.
There are now 121 institutions with a total quota of US$21.6 billion that can invest in the domestic stock and bond markets.
The China Securities Regulatory Commission grants licenses for QFII while SAFE, part of the PBOC, decides on the quota for each entity.
Seven new QFIIs were each awarded US$100 million and three existing QFIIs, which already had quotas, received US$250 million, according to a latest statement by the State Administration of Foreign Exchange on its website.
This year's quota was the lowest since 2007, and 40 percent lower from that of last year.
The unstable international market environment has prompted some QFIIs to withdraw capital from China which saw foreign direct investment fall 9.8 percent annually in November to US$8.8 billion - the first time in more than two years that foreign funds had left the market.
The People's Bank of China said last week it has approved the branches of 12 Hong Kong brokerages to run yuan-denominated fund management business under the trial Renminbi Qualified Foreign Institutional Investor scheme.
"These new moves, including the newly granted quotas since October, is a clear sign that regulators want to guide the inflow of capital to boost the confidence of the capital market," GF Securities' analyst Zhen Wenqi wrote.
There are now 121 institutions with a total quota of US$21.6 billion that can invest in the domestic stock and bond markets.
The China Securities Regulatory Commission grants licenses for QFII while SAFE, part of the PBOC, decides on the quota for each entity.
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