ASSET OWNERS

Norges Bank adds $1 billion in China QFII quota, lifting total to $2.5 billion

China’s State Administration of Foreign Exchange awarded Norges Bank Investment Management an additional $1 billion in quota capacity to invest in China’s domestic capital markets under its qualified foreign institutional investor program.

On Feb. 27, the latest monthly update of QFII awards on SAFE’s website showed the quota for Norges Bank, which manages the $870 billion Oslo-based Government Pension Fund Global, jumping to $2.5 billion from $1.5 billion at the end of January.

Norges Bank is only the second institutional investor to garner that much quota capacity. In September, the Hong Kong Monetary Authority became the first to reach US$2.5 billion. Currently, a handful of sovereign wealth funds and central banks have quotas of US$1.5 billion.

Other asset owners winning quotas in February were Bank of Korea, which got an additional $300 million to lift its overall quota to $900 million, and the University of Pennsylvania, Philadelphia, which got an initial quota of $75 million.

The big award to Norges Bank in February comes as MSCI, for the second year in a row, will be facing a midyear decision on whether to include an initial sliver of China’s domestic A-shares market in MSCI’s widely tracked emerging markets indexes.

In mid-2014, MSCI ultimately decided against such a move, with concerns expressed by the biggest money management firms about continued regulatory hurdles to investing in China’s markets playing a role in that decision.