MAS names sustainability head; Malaysia’s EPF appoints COO and CFO; GIC PE head for SEA leaves; State Super hires new exec; Hesta appoints chief growth officer, chief Debby Blakey appointed to corporate governance board; ex-BlackRock exec joins IQ-EQ in Singapore; HSBC AM builds direct real estate team; ex-Vanguard head of distribution joins LGIM; Sanne names Singapore head; and more
Christopher Cox, chairman of the SEC, said at the signing ceremony with Liu Minkang, chairman of the CBRC, that the US regulator would work closely with the CBRC for information exchange, monitoring and building a cooperative framework for QDII developments.
The deal has come after a recent state visit by US Secretary of the Treasury, Henry Paulson, to China. Paulson, responding to Chinese premier Wen JiabaoÆs vocal concerns on the US economy, reassured China about the US's long-term stability and said the subprime crisis would be limited.
PaulsonÆs previous attendance of a Strategic Economic Dialogue conference with Chinese officials has resulted in a three-fold increase in total qualified foreign institutional investor (QFII) quotas from $10 billion to $30 billion. The QFII programme, unlike QDII, allows overseas investors to invest in Chinese domestic securities.
Unlike its more progressive counterparts in the China Securities Regulatory Commission, which provides oversight to fund management and brokerage houses, the CBRC has only recognised four other foreign markets. The 23 domestic and foreign banks with QDII licenses are allowed to participate in æmatureÆ markets, such as Hong Kong, Singapore, the UK and Japan.
At the height of the overseas investment frenzy in October last year, the QDII scheme was believed to have attracted close to $25 billion of liquidity from both Chinese and foreign investors into the Hong Kong market, driving one of the most aggressive run-ups in the Hang Seng Index to over 30,000 points, which led to a period of uncertainty in inflation, and Hong Kong citizens calling for the unpegging of the Hong Kong dollar from the US dollar.
The scheme has been on a respirator since, particularly following the spread of the subprime crisis to global markets. Minsheng Bank has been one of the key victims affected as it announced the collapse of its QDII product.
The outlook for the QDII scheme remains uncertain for the rest of 2008, given that Paulson's other agenda includes the revaluation of the renminbi. His previous lobbying might have partly contributed to an upward surge in the Chinese currency against the dollar: just in the past quarter, it has risen by 4%. Chinese citizens view dollar-linked investments with a wary eye and the expectation of depreciation. Observers widely believe the yuan will rise further to see a US-RMB cross-rate below seven this year.
An internal source says the Chinese regulators are closely monitoring developments in the US and UK on the subprime crisis and the emergence of super-regulators for financial market oversight. Chinese leaders are drawing parallels within in the QDII system, CSRC, CBRC, CIRC (an insurance regulator), the State Administration for Foreign Exchange (SAFE), not to mention the National Development & Reform Commission and even the State Council from day-to-day operations to policy designs.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
Investors are seeing the risks, but also the opportunities of the logistics sector. Warehousing their fears for the moment, they can see it's a good conduit to high-growth assets.
Insto roundup: GPIF staff say J-Reits more attractive than traditional assets; Hong Kong's strict Spac criteria
EISS Super hit by another scandal; China's CSRC launches consultation on disclosure requirements for new BSE securities; Hong Kong issues consultation paper on Spacs; New World Development partners with China Taiping to focus on Greater Bay Area projects; GPIF employees say Japanese Reits have grown more attractive; Taiwan's BLF invites bid for $1.7 billion mandate; and more
SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.