As markets boom, cash pours in from abroad 
2019-04-30
Foreign financial institutions invested heavily in Chinese stocks in the first quarter due to the bullish stock market.
The holdings of financial institutions in China’s stock market through the Qualified Foreign Institutional Investors program passed 96 billion yuan (US$14.26 billion) by end-March, up more than 50 percent from the end of last year, Securities Daily reported yesterday.
The paper said the surging stock market lured foreign investors to buy in more, and fast-rising share prices also boosted the value of their holdings.
The benchmark Shanghai Composite Index has increased more than 20 percent since the start of the year.
Societe Generale, a French multinational investment bank, has been one of the biggest buyers. In its investment portfolio of 141 listed Chinese companies, 138 were added in the first three months.
Sectors including machinery, home appliances, chemicals, medical equipment, property and auto parts were particularly favored by foreign investors.
The QFII program, introduced in 2002, allows overseas institutional investors to buy into China’s capital market, and financial authorities have been since then lowering the threshold of the program to facilitate capital flows.
The securities watchdog unveiled draft rules that will combine the QFII program and another existing scheme for foreign investors in January, with easier access and expanded investment scopes, shortly after the foreign exchange regulator doubled the total quota of the program to US$300 billion.
