China grants record $2.8 bln of foreign investment quotas in Oct

SHANGHAI, Nov 13 (Reuters) - China granted a record $2.8

billion in quotas to overseas investors in October, stepping up

efforts to open its capital markets amid slowing fund inflows.

The country's foreign exchange regulator said it awarded a

combined $1.3 billion in additional quotas to the Government of

Singapore Investment Corp and Temasek Fullerton Alpha

Investments, highlighting its recent push to boost investment

from sovereign wealth funds.

It handed out new and additional quotas to seven other

institutions including Barclays Bank Plc and JPMorgan

Chase & Co, according to a statement published on its

website on Tuesday.

In total, quotas worth $2.75 billion were granted last month

to invest in China's stock and bond markets under the Qualified

Foreign Institutional Investor (QFII) scheme, the biggest for

any single month and almost matching the total given during the

third quarter.

China's top securities regulator Guo Shuqing said on Sunday

Beijing will lift the QFII investment ceiling if its current,

80 billion yuan ($12.84 billion) limit is reached. As of

end-October, 192 QFIIs have been awarded $33.6 billion in

quotas.

Guo also said it plans to nearly triple the quota under the

Renminbi Qualified Foreign Institutional Investor (RQFII)

scheme, which allows overseas investors to buy Chinese

securities using offshore yuan, to 200 billion yuan.

China has been actively promoting the QFII scheme in recent

months, including holding investor presentations overseas, as

fund inflows have slowed partly due to concerns over health of

the economy.

China launched QFII in 2003 as part of efforts to attract

foreign investment and reform its capital markets.

China's stock markets have underperformed much of the rest

of Asia for several years running on cooling economic growth and

a raft of government measures to curb the red-hot property

sector.

The Shanghai Composite index has lost 7 percent so

far this year after dropping more than 20 percent in 2011 and

around 15 percent in 2010. By comparison, the MSCI index of Asia

Pacific stocks ex Japan has risen more than 12

percet so far this year.

Source: http://news.yahoo.com/china-grants-record-2-8-bln-foreign-investment-060753174--sector.html

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