KUALA LUMPUR: Malaysia’s quota of 50 billion yuan under the Renminbi Qualified Foreign Institutional Investor (RQFII) programme is up for grabs for fund managers wanting to invest in the Chinese market.
The applications are now open for submission to RQFII’s custodian banks, including HSBC.
HSBC Malaysia head of global markets Alvin Kong said RQFII offered a diversification opportunity for investors wanting to have investments in renminbi (also known as the yuan) currency.
“The scheme has been around for two years, but the quota for Malaysia was just announced two weeks ago.
“RQFII offers flexibility for fund managers to access the market, and in terms of asset allocation, the number of brokers that one can deal with, and in terms of repatriation,” he said during the RQFII media teach-in session here, yesterday.
RQFII is the regime that allows asset managers to setup funds or products raising offshore renminbi to invest in the Chinese market.
“We are planning an event to gather fund managers here and provide more education to the investment community sometime in mid-January next year,” Kong said.
The bank said it provides a one-stop renminbi related products and services in custody service, and has 48.53% market share (as at November) in terms of total approved RQFII quota.
The session here was conducted by Patrick Wong, Head of China Sales and Business Development, HSBC Securities Services, Hong Kong via video conference and supported locally by Alvin.
Wong said so far, the RQFII scheme had expanded to 15 countries, with total number of approved RQFII (as at October) at 179 and total approved quota in market (as at November) at RM436.52 billion.
“As for the latest market statistics, the remaining quota is 673.47 billion yuan,” he said.
Available instruments for RQFII are exchange traded or transferred A-shares, bonds and warrants, fixed income products traded in interbank bond market, securities investment funds, index futures, subscription to initial public offering, additional issuance like rights issues and other instruments approved by the China Securities Regulatory Commission.
“With no investment allocation restriction, RQFII can access various renminbi asset classes, including fixed income instruments in China’s interbank bond market.
“There is also no lock up period for open-ended funds and no requirements on asset under management,” Wong said, adding that additional quota application (for RQFII) is based on utilisation.
Source: http://www.thesundaily.my/news/1638697
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