China to Keep Foreign Investors at Arm's Length With 30% Limit on Single Stock, CSRC Says
Wang Juanjuan
/SOURCE : yicai
China to Keep Foreign Investors at Arm's Length With 30% Limit on Single Stock, CSRC Says

(Yicai Global) March 8 -- MSCI's plan to boost its inclusion factor of Chinese stocks in its global indexes this year has not persuaded the nation to completely open  the floodgates for foreign capital. Shareholding quotas are here to  stay, according to the deputy chief of the top securities authority.

Regulators  are not considering to ease the limit of overseas investors'  shareholding in Chinese companies, Fang Xinghai, the vice chairman of  China Securities Regulatory Commission, told Yicai Global yesterday.  Fang was speaking at the ongoing high-level annual political conference  which goes by the name of Two Sessions. 

Overseas  investors can hold up to 30 percent of all outstanding shares of a  single Chinese company. The CSRC also sets a limit for the maximum value  of the investment. Traders need to place orders via the Shanghai-Hong  Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect  scheme. 

Foreign  investors have been hitting the upper limit on some stocks, Fang said.  Chinese bourses have rebounded in mid-February after a lackluster year  in 2018, which may be one of the reasons behind the buying spree.

On  March 11, global index compiler MSCI will delete Han's Laser Technology  Industry Group from its China benchmarks because overseas investors  have come to hold over 28 percent of the stock, which triggered a  warning. The problem is in the access to the equity, the New  York-headquartered firm said in a statement. 

Chinese  home appliances maker Midea Group is getting closer to the limit as  foreigners held 27.35 percent of the stocks at the close on March 6,  according to public information from Shenzhen's bourse.

Editor: Emmi Laine 

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Keywords: Stock Market , QFII , RQFII , Foreign Investor , Stock Connect Program