“Chinese regulators expanded a program allowing institutions to raise yuan offshore for investment in the mainland, a step that moves the nation closer to a freely traded currency and may bolster confidence in the stock market.
Financial institutions registered in Hong Kong and the Hong Kong units of Chinese banks and insurers will be allowed to join units of Chinese brokerages and fund-management firms in theRenminbi Qualified Foreign Institutional Investors program, according to a statement posted on the China Securities Regulatory Commission’s website yesterday. The regulator also expanded the range of products participants can invest in beyond exchange-traded stock funds and bonds.
Standard Chartered Plc (STAN) said today it would be “very interested” in participating in the program. The expansion comes as legislators meet this week at the annual National People’s Congress in Beijing, during which a new generation of Communist Party leaders headed by Xi Jinping assumes oversight of the world’s second-largest economy. The party pledged in November to make the exchange rate more market-based and promote freer movement of capital in and out of the country for investment purposes.
“This announcement will be welcomed with open arms by the many major foreign financials with any kind of significant presence in Hong Kong,” Z-Ben Advisors, a Shanghai-based fund researcher, said in a report today. “We anticipate at least 20 will be lining up to apply for an RQFII license in the coming months.” …”
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