Taiwan QFIIs can now invest 100% in A-shares
04 October 2012
News, Asia, China, Taiwan
By Hui Ching-hoo
Taiwan’s Financial Supervisory Commission (FSC) announced last week that it would allow qualified foreign institutional investor (QFII) funds to raise allocations to the A-share market from the current 30% to 100%.
Six Taiwanese QFII participants – Yuanta, Cathay, Capital, Fuhwa, Prudential, and Fubon – are expected to be the main beneficiaries of the measure. The six institutions have combined a QFII quota of US$570 million.
Capital Investment Trust President Vincent Lai told Asia Asset Management that the removal of A-share investment restriction will facilitate Taiwanese QFII participants to access the Mainland market more directly and to take advantage of China’s vibrant economy.
Mr. Lai added that the firm has received a $100 million QFII quota and that its overseas fund products have drawn down the quota to invest in A-shares.
According to Donna Chen, managing director of Keystone Intelligence, the move marks a milestone in cross-strait capital flows – although she notes that the existing QFII quota for Taiwanese asset managers is minute. “Once the door is opened, it will trigger other complementary financial initiatives,” she predicts.
Ms. Chen anticipates demand for QFII quotas from local fund managers as a result of the new initiative.
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