China's regulators boosted the amount of quotas available for foreign institutional investors to buy locally listed stocks and bonds to $150 billion from $80 billion.
The China Securities Regulatory Commission, in an announcement on its website Friday, said the sharp increase for the Qualified Foreign Institutional Investor program launched in 2002 reflects the program's “smooth” functioning, with the value investment philosophy and long-term outlook of those foreign institutions contributing to the stability of the local A-shares market.
The latest move comes just 15 months after China's regulators lifted the QFII program's initial ceiling of $30 billion to $80 billion, and while more than $35 billion in capacity under that $80 billion limit remained.
In addition, China's regulators announced that their Renminbi QFII program, launched in December 2011 to allow an initial 20 billion yuan ($3.2 billion) of Hong Kong-listed exchange-traded funds to be invested in China's local A-shares market, would be extended to Singapore and London. That announcement comes roughly a month after Taiwan, in June, became the second market designated for an RQFII “pilot program.”
In a telephone interview, Chia Chin Ping, Hong Kong-based managing director of Asia-Pacific research for MSCI Inc. — which recently launched a review of China's A shares for potential inclusion in the MSCI emerging markets index on the strength of the past year's regulatory reforms — said these latest signs of China's determination to keep that market opening momentum going were “all good.”
Important issues have yet to be hammered out, but it's clear there's more to come, Mr. Chia said in the interview.