Morgan Stanley Applies to Take Part in QFII Scheme

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Last updated at: (Beijing Time) Wednesday, March 26, 2003

Morgan Stanley Applies to Take Part in QFII Scheme

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Investment banking giant Morgan Stanley said it had applied to the securities regulator to take part in the qualified foreign institutional investor (QFII) scheme, hoping to become the first member of the scheme involving China's A-share market.

Once given the green light, the company plans to invest in a mixed fund pool as soon as possible in the US$500 billion A-share markets, said Jonathan Zhu, managing director of Morgan Stanley Dean Witter Asia Ltd.

Speaking after the launch of the banking firm's Chinese website yesterday, Zhu said it will first make small-scale investments from a mixed fund composed of money of its own and from other investors. The company is likely to make larger investment plans later.

But Morgan Stanley refuted earlier speculation that it will join with another investment banking company Goldman Sachs to establish a fund to invest in China's huge A-share market, which until now has been limited to domestic investors.

China announced in December the new rules allowing foreign investors to buy into the A-share market.

The central government made the decision to boost the gloomy market, which has suffered from a two-year slump since mid-2001.

Apart from direct trading in the A-share market, foreign investors will also be allowed to buy into domestic initial public offerings, rights offerings, additional share issues and convertible bonds issues from listed firms.

They are expected to be allowed to invest in China's close-end and open-end funds, said a statement released recently by China Securities Regulation Commission, the country's securities watchdog.

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