Craze seen in Japan for investment in Chinese enterprise stocks

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Last updated at: (Beijing Time) Tuesday, February 17, 2004

Craze seen in Japan for investment in Chinese enterprise stocks

Many Japanese securities companies and investment funds management companies established funds to be specially invested in companies listed in China or start trust businesses for direct purchase and sales of Chinese stocks. This has created a craze for investment in stocks of China's enterprises.

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Recently, since Japanese investors are optimistic about China's economic prospects and due to a great increase of needs for investment in China's securities market, many securities companies and investment funds management companies established funds to be specially invested in companies listed in China or start trust businesses for direct purchase and sales of Chinese stocks. This has created a craze for investment in stocks of China's enterprises.

Japanese Sumitomo Mitsui Asset Management Company recently put out two "China Funds" totaling 200 billion-Yen. One of them is mainly invested in listed companies dedicated to producing and selling consuming goods. The other, positioned as a long-term investment, is mainly for listed companies with good performance, dividends and good in growth potential. As the largest Japanese investment company of fund management in China Sumitomo Mitsui Asset Management Company has established 23 kinds of funds invested in Chinese stocks.

Daiwa SB Investments Ltd put forward in January 2004 investment fund called "China Soaring" totaling 200 billion Yen. The fund is mainly invested in the H-Shares in Hong Kong stock market and B-Shares in Shanghai and Shenzhen stock markets as a long-term investment fund.

Okasan Securities Co., Ltd is also set to start recommending investment fund specially used for investing in China to individual investors in Japan from 13 February 2004. Access to buying and selling H-Shares and B-Shares of Chinese enterprises can no longer meet the needs of Japanese individual investors who hope to participate in the investment in Chinese stock market in an all-around way. Therefore, Okasan Securities decided to establish investment fund to indirectly enter China's A-Share market through the "foreign qualified investor institution" which has been approved by China's departments concerned.

Nomura Securities Co., Ltd, Nikko Securities Co. Ltd and Tokai Tokyo Securities Co., Ltd all put out funds invested in Chinese stocks or started to take the trust of Japanese individual investors as an agent to buy and sell H-Shares in Hong Kong and B-Shares in Shanghai and Shenzhen.

The main reason for the craze in Japan for investing in Chinese enterprises listed is that Japanese investors received an amazing rewards in 2003 and benefits related to China's securities businesses such as stock shares that also became the main sources of profits for many Japanese securities companies. According to report by Japan Economic Journal, the assets of the 43 funds established by Japan invested in stocks of Chinese enterprises increased by 40-70 percent in the year gone by.

The benefits received by the individual investors who entrusted securities companies to directly buy and sell stocks in B-Share market in China's mainland and Hong Kong are more conspicuous. Presently, a bestseller in Japan is a book called "Earned 100 Million Yen by Investing in Chinese Stock Market."

According to Japan Economic Journal, the financial reports of the fourth quarter issued by various Japanese securities companies recently one after the other showed that due to the selling and buying shares in China's mainland and Hong Kong, profits of the companies soared. Of the 2.3 billion Yen of profit earned in the fourth quarter of 2003 by the Tokai Tokyo Securities Co., Ltd, 1 billion came from the commission in the stock dealings in China.

By People's Daily Online

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