Qatar Seeks $5bn Quota

Qatar is applying for a $5 billion quota in China’s Qualified Foreign Institutional Investor (QFII) scheme, the main channel for foreign investment in Chinese stock and bond markets, the official China Securities Journal reported on Monday.

Qatar’s Energy and Industry Minister Mohammed Bin Saleh al-Sada told the newspaper the QFII quota will be used to invest income earned from selling liquefied gas to China in the country’s securities market as well as initial public offerings.

QFII quotas are currently capped at $1 billion per each investor but official media reported last month Chinese regulators are looking at increasing the cap.

Thirty-seven QFIIs, including Norges Bank and Abu Dhabi Investment Authority, have applied to increase their quotas by a combined $12.54 billion, it said.

China has been launching a series of steps intended to attract more investment in the country’s capital markets, including stepping up efforts to expand the QFII programme, which it launched in 2003.

Last week, China’s securities regulator said it is looking at increasing the cap on the combined stake in a listed company held by QFIIs to 30 per cent from 20 per cent.

Earlier this year, the government raised the total maximum QFII quota by $50 billion to $80 billion. Under the QFII programme, an investor is given a licence and an investment quota by regulators.

As of April 16, China had granted QFII licences to 170 investors, and 129 of them had obtained combined quotas of $25.19 billion from the country’s foreign exchange regulator.

The State Administration of Foreign Exchange (SAFE) had said it will adopt fast-track procedures and allocate more quotas to foreign investors such as pension funds, government-linked funds and insurers.