(Yicai Global) Jan. 14 -- China's mainland is doubling its quota on investment from overseas stock traders to buoy its capital markets that had a tumultuous year last year.
China will lift the annual limit to USD300 billion from USD150 billion for qualified foreign institutional investors to satisfy the demand, the State Administration of Foreign Exchange said in a statement today.
Offshore investors are showing an increasing interest in Chinese equities despite the fact that major mainland stock indexes logged double-digit declines last year. US-based benchmark compiler MSCI started gradually including more and more Chinese shares in its emerging market index since last June. China is also ushering in its stock connect scheme between the two bourses of Shanghai and London, to be launched potentially this month.
The QFII scheme was launched in 2002 to allow foreign traders to access Chinese stocks. The SAFE started reforming the program in 2016 to ease regulation by lifting limits, shortening lockup periods, and allowing foreign exchange hedging to avoid currency risks.
Global financial firms such as Zurich-based UBS, New York-headquartered Morgan Stanley, and Goldman Sachs, have applied to join the program.
Editor: Emmi Laine