Increased quota for capital markets part of Beijing's effort to get more long-term foreign investors
Qatar Holding, the investment arm of Qatar's sovereign wealth fund, has been granted a US$1bn quota to invest in China's capital markets, as Beijing steps up efforts to introduce long-term foreign investors to try and stabilise its volatile stock market.
Official Chinese media reported in June that Qatar was applying for a US$5bn quota under China's Qualified Foreign Institutional Investor (QFII) scheme, the main channel for foreign investment in Chinese stock and bond markets.
QFII quotas are currently capped at US$1bn per investor although official media has reported Chinese regulators are looking at increasing the cap.
In addition to Qatar Holding, ten more foreign investors, including the Ontario Pension Board, Macquarie Bank and HSBC Holdings Plc were also granted fresh or additional quotas in November, according to the State Administration of Foreign Exchange (SAFE), the foreign exchange regulator.
In total, SAFE granted US$2.48bn of QFII quotas last month, slightly down from a record US$2.75bn granted in October.
China in April raised the ceiling of the overall QFII scheme to US$80bn from a pervious target of US$30bn, and has been shifting its target investor base in the QFII scheme to long-term players such as sovereign, pension and endowment funds.
China has so far granted $36 billion worth of quotas to 165 QFII investors