|
By Katrina Mennen A. Valdez, Reporter
MAINLAND Chinese may soon invest in Philippine
Stock Exchange listed shares of stock after the government applied
to be included in Beijing’s Qualified Domestic Institutional
Investor (QDII) program.
Francis Chua, special envoy to China, said the
Securities and Exchange Commission has written to the Chinese
Ambassador to the Philippines expressing interest in QDII.
“[Once] approved they will be allowed to buy
[our] stocks,” Chua said.
QDII is a scheme set up to allow Chinese
financial institutions to invest in offshore financial markets. This
is similar to QFII (Qualified Foreign Institutional Investor), which
is a transitional arrangement that provides limited opportunities
for domestic investors to access foreign markets at a stage wherein
a country’s currency is not floated freely and where capital is
unable to move completely free.
In the People’s Republic of China, QDII allows
investors to invest in foreign securities markets through certain
fund management institutions, insurance companies, securities
companies and other assets management institutions approved by the
China Securities Regulatory Commission (CSRC).
Two years ago, Beijing announced the QDII
scheme, allowing Chinese institutions and residents to entrust
Chinese commercial banks to invest in financial products overseas.
But the investment was limited to fixed-income and money market
products.
After granting 15 banks and funds a quota of
$14.2 billion to invest overseas, Beijing announced in May 2007 the
widening of the scope of the QDII investment. With certain
restriction, banks can now offer stock-related products.
The net value of a QDII product investing in
stocks must not exceed 50 percent, with the net value represented by
a single stock capped at 5 percent. The minimum commitment by each
client is 300,000 yuan. Also, the stocks invested or the fund linked
must be listed on or approved by a market with a memorandum of
understanding with the CSRC.
Chua said that at present there are at least 30
member countries covered by China’s QDII.
|
