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Thursday 19 February 2009
Foreign investors win head start in A-shares
Foreign institutional investors made a rosy start on the A-share market this year, outperforming mainland mutual funds last month, fund data provider Lipper reported.
Foreign institutional investors made a rosy start on the A-share market this year, outperforming mainland mutual funds last month, fund data provider Lipper reported.
Four qualified foreign institutional investor (QFII) funds that have published their performances for the month reported average growth in net assets of 7.62 per cent, beating the average gain of 6.74 per cent at their domestic counterparts.
The Shanghai Composite Index jumped 9.3 per cent last month after plunging 65.4 per cent last year.
“After the steep fall last year, the funds will be able to perform relatively better this year because of the low base,” said Hu Zhuowen, an analyst at Orient Securities. “They may keep increasing A-share holdings amid the current rally.”
Analysts said the QFII funds held relatively more A shares at the end of last year, as they were more bullish on the market given the low valuations.
Lipper said last month’s performance bodes well for this year’s outlook and that Beijing’s measures to stimulate domestic demand would propel economic growth.
Beijing approved four new QFII funds in December, bringing the total to 78. It increased the QFII quota from US$1 billion to US$3 billion early last year to widen foreign funds’ access to the yuan-denominated A shares.
Last year, the regulator gave the green light to 24 foreign institutions to trade the volatile stocks.
Though the market has been mired in a bearish mood, some foreign investors have reportedly started to hunt for bargains.
In November, UBS Securities, one of the country’s first QFII investors, shelled out 900 million yuan (HK$1.022 million) to buy A shares through the off-market block trade system. The move was seen as a clear sign that the overseas investors had started to bet on a turnaround on the A-share market.
The mainland embarked on the QFII programme in 2003, hoping to raise the tone of a volatile market where people used to trade shares on rumours.
The assets managed by QFIIs are still far less than the funds run by more than 400 domestic mutual funds, which hold shares worth more than 2 trillion yuan.
Overseas-equity-based funds saw their assets drop 8 per cent last month owing to the rout in equities overseas, Lipper said.
Nine qualified domestic institutional investor funds managed by the mainland’s asset management firms now trade overseas stocks.
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Foreign investors win head start in A-shares
Daniel Ren in Shanghai
17 February 2009
Foreign institutional investors made a rosy start on the A-share market this year, outperforming mainland mutual funds last month, fund data provider Lipper reported.
Four qualified foreign institutional investor (QFII) funds that have published their performances for the month reported average growth in net assets of 7.62 per cent, beating the average gain of 6.74 per cent at their domestic counterparts.
The Shanghai Composite Index jumped 9.3 per cent last month after plunging 65.4 per cent last year.
“After the steep fall last year, the funds will be able to perform relatively better this year because of the low base,” said Hu Zhuowen, an analyst at Orient Securities. “They may keep increasing A-share holdings amid the current rally.”
Analysts said the QFII funds held relatively more A shares at the end of last year, as they were more bullish on the market given the low valuations.
Lipper said last month’s performance bodes well for this year’s outlook and that Beijing’s measures to stimulate domestic demand would propel economic growth.
Beijing approved four new QFII funds in December, bringing the total to 78. It increased the QFII quota from US$1 billion to US$3 billion early last year to widen foreign funds’ access to the yuan-denominated A shares.
Last year, the regulator gave the green light to 24 foreign institutions to trade the volatile stocks.
Though the market has been mired in a bearish mood, some foreign investors have reportedly started to hunt for bargains.
In November, UBS Securities, one of the country’s first QFII investors, shelled out 900 million yuan (HK$1.022 million) to buy A shares through the off-market block trade system. The move was seen as a clear sign that the overseas investors had started to bet on a turnaround on the A-share market.
The mainland embarked on the QFII programme in 2003, hoping to raise the tone of a volatile market where people used to trade shares on rumours.
The assets managed by QFIIs are still far less than the funds run by more than 400 domestic mutual funds, which hold shares worth more than 2 trillion yuan.
Overseas-equity-based funds saw their assets drop 8 per cent last month owing to the rout in equities overseas, Lipper said.
Nine qualified domestic institutional investor funds managed by the mainland’s asset management firms now trade overseas stocks.
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