Spark Global Limited reports:
According to the website of China Securities Regulatory Commission, in December 2020, Kadensa Capital Limited was granted China Qualified Foreign Institutional Investor (QFII) qualification, which has activated the enthusiasm of foreign institutions to plan the domestic market. In December 2020 alone, as many as 26 foreign institutions have been approved for QFII, and several foreign institutions are applying for relevant qualifications. Huale Capital will also take Hong Kong as its foothold to radiate the whole Greater China region.
At present, the enthusiasm of foreign capital to enter the Chinese market is getting higher and higher. A director of the international business department of a large fund company said that institutions have been more active in applying for QFII qualifications than before, because the stocks included in the Stock Connect cannot meet the demand, such as those on the science and technology innovation board. And QFII investment is not restricted, can plan secondary new shares. In addition, QFII can invest in the trading of listed bonds, as well as the advantages of standardized ABS, off-network subscription of new shares and strategic allocation, which are not covered by the interconnection mechanism. Foreign institutions regard QFII qualification as an effective complement to connectivity.
“At present, foreign investment in China is in a state of systemic low allocation. Globally, the overall valuation and earnings of A-shares are still quite absorbent, and the bond market is equally absorbent. Foreign investment is becoming more and more interested in entering the domestic market.” A QDII fund manager said.
Another Hong Kong institutional personage said that foreign demand for qualifications may be the asset allocation request of relevant institutions, with QFII or RQFII qualifications is easy to compare.
A fund company executive previously said that foreign institutions value domestic economic and political stability and exchange rate stability, and they are confident about their future development. The profit making effect of A-shares has also attracted more overseas investors to pay attention to the Chinese market, and their planning willingness has gradually increased. Confidence policy “warm wind” frequency under the blow, there will be more and more institutional capital influx.