Kuwait Becomes Top Foreign Investor in China RMB MarketSource: www.export-egypt.com 1/22/2014, Location: Middle East |
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Kuwait Investment Authority (KIA) has become the biggest foreign investor in China's renminbi (RMB or yuan) public market with a total USD 2.5 billion investment quota, the Chinese government said.
According to the State Administration of Foreign Exchange (SAFE), KIA received fresh quota of USD 500 million this week for direct investment in the Chinese securities market.
With the new allocation, KIA's accumulated investment quota as a qualified foreign institutional investor (QFII) reached USD 1.5 billion. Separately, in 2012, KIA received a USD one billion quota under another program managed by China's central bank to invest in the domestic interbank bond market. The latest announcement boosted KIA's combined investment quota in the Chinese stock and interbank bond markets to USD 2.5 billion, promoting KIA as top foreign investor in China's renminbi public market. This came amid the yuan's strengthening trend against the dollar, which makes it more difficult for foreign investors to get approval of quota. The yuan has appreciated about 30 percent since 2006. China launched the QFII program in 2002 to allow qualified overseas funds to buy and sell yuan-denominated A-graded shares within the SAFE-set quota. Kuwait's sovereign wealth fund is one of only four QFIIs that the SAFE have granted the highest USD 1.5 billion quota. Other three institutions are Hong Kong Monetary Authority, Norway's Norges Bank and the Singapore-based Temasek Fullerton, according China's foreign exchange regulator. KIA received the initial investment quota of USD 300 million in March 2012 and an additional USD 700 million in January last year after the inauguration of its Beijing Representative Office and obtained a QFII license late 2011. KIA, which manages Kuwait's oil generated-assets, said that the fund's investment in Greater China including Hong Kong has grown to USD eight billion after its entry into the regional market in 2000. The fund launched Beijing Representative Office as its first overseas office since the establishment of London office in 1953. As of Dec. 25, the SAFE had approved a combined investment quota of USD 49.7 billion to 228 QFII license holders. |
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