(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