China's investment quota for Qualified Foreign Institutional Investors was boosted to US$150 billion, with the trial of renminbi-QFII expanding first to Hong Kong and then to Singapore, London and others. So far this year, the State Administration of Foreign Exchange has newly granted US$6.02 billion of QFII quotas to 22 foreign institutional investors.
The total of 5.52 million A-share accounts opened last year in China was only about half the previous year's total as the market lagged behind others globally. The number marked a six-year low and was less than 10% of the record total recorded in 2007, according to figures from China Securities Depository and Clearing. However, China's new opening to qualified foreign institutional investors led to a historic high of 120 accounts in 2012.
Investors under China's qualified foreign institutional investor program have been piling into the market recently, the China Securities Regulatory Commission reports, lured by projections that "A" shares are due for a 20% rise in 2013. The influx comes after lagging gains in the "A" market left it one of the worst global performers this year.
At US$1 billion, China's new QFII award to Qatar Holding is the largest ever by the State Administration of Foreign Exchange. It's part of the latest issue of awards totaling US$2.5 billion and tops the US$700 million QFII awards to the Hong Kong Monetary Authority and Temasek Fullerton Alpha earlier this year.
A record $2.75 billion quota was granted last month for China's Qualified Foreign Institutional Investor programme, topping the previous high of $2.1 billion in March. The big opening by the State Administration of Foreign Exchange indicates that China is accelerating plans to pull more foreign money into capital markets.