Chinese brokerage dealers and fund managers are gearing up to assess investing in the local bourse before cross-strait financial memorandums of understanding (MOUs) take effect next month to free up Taiwan-bound investments, Standard Chartered Bank executives said yesterday.
“Their interest level is very high,” Beijing-based Jerry Zhang (張曉蕾), head of the bank’s financial institutions in China, said in Taipei.
The bank briefed a group of 21 management-level brokerage dealers and fund managers from 16 securities and asset management firms from Beijing, Shanghai, Shenzhen and Guangzhou yesterday, most of whom are qualified domestic institutional investors (QDIIs) in their home country and who made a five-day trip to Taiwan to learn about the local investment environment and companies.
“Taiwan [shares] will now be on their radar” once the ceiling of their Taiwan-bound share investments is eased, Zhang said.
The bank declined to name the visiting companies, except to say that the largest manages more than 200 billion yuan (US$29.3 billion). Once the cross-strait MOU, which was inked on Nov. 16, takes effect 60 says after its signing, Chinese QDIIs will be allowed to invest up to 10 percent of their US$10 billion assets in Taiwan’s stock market, the Financial Supervisory Commission said.
That will translate into a maximum of NT$30 billion (US$928.6 million) in potential capital injection.
Under Chinese law, Chinese QDIIs are only allowed to invest up to 3 percent of their assets in public and corporate bonds in regions that have not signed an MOU with China.
Zhang said it was still too early to say when and how much these Chinese QDIIs will inject into the local bourse since they need to become comfortable with the Taiwanese market first.
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