BIZCHINA / Center
Banks spend less than 6% of overseas investment quota
(Xinhua)
Updated: 2007-06-01 14:32
China's banks have used only six percent of their quotas for overseas
investment, a banking regulatory official said in Beijing Thursday.
The China Banking Regulatory Commission (CBRC) had approved 22 banks as
qualified domestic institutional investors (QDIIs) with a total quota of
14.8 billion U.S. dollars, said Yin Long, deputy director general of the
CBRC's supervisory cooperation department for banking innovation.
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The banks had only "regrettably" invested 800 million to 900 million U.S.
dollars overseas, he told a forum held by the French bank Societe
Generale.
"It is not that we discourage overseas investment or the banks are not
interested in that business," he said, explaining that overseas
investments by QDIIs had been hindered by China's strong stock market and
expectations of yuan appreciation.
Market enthusiasm for the QDII scheme launched in July last year had
cooled as many investors feared a rising yuan would eat into their
investment return, which came only from fixed-income products and
money-market products.
After four years in the doldrums, China's stock markets began to rebound
at the beginning of 2006, with the benchmark Shanghai Composite Index
nearly doubling in a year.
Overseas investment on behalf of clients would become a major business
trend for the banking sector because yuan appreciation could not last
forever and the domestic stock market would stabilize eventually, he said.
QDIIs are allowed to invest up to 50 percent of their overseas investment
in stocks, but stock trading is still restricted to Hong Kong, with a
single holding capped at five percent of a product's asset value.
(For more biz stories, please visit Industry Updates)
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