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People's Daily Online>>China Business

New yuan ETFs get licensed

(Global Times)

08:12, April 20, 2012

Chinese regulators have started licensing domestic funds to create new yuan-denominated exchange-traded funds (ETFs) for sale in Hong Kong, hoping to get fresh investors to use the yuan accumulated offshore to invest in Chinese mainland markets.

Within two weeks of announcing a 50 billion yuan ($7.9 billion) increase in the quotas for the Renminbi Qualified Institutional Investor (RQFII) program, China's market regulator has already issued licenses for the Hong Kong subsidiaries of some domestic fund management companies to create new funds, according to sources and media reports.

The speed with which the central government is ramping up approval of fresh quotas shows its determination to stimulate interest among overseas investors.

The initial batch of funds on offer, which were limited largely to buying Chinese bonds, have faced challenges attracting demand in Hong Kong.

"We know that the fundraising has been mediocre," said Winnie Deng, an analyst at Z-Ben Advisors covering the offshore yuan fund market.


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