Stocks News
- China allows its banks to buy overseas stocks
Date: 14-May-2007 Sources: (Xinhua Online)
China has eased restrictions on its commercial banks by allowing them to invest in overseas stock markets for the first time, according to the China Banking Regulatory Commission.
Commercial banks can now invest up to 50 percent of their funds in the qualified domestic institutional investors program to buy overseas stocks, the commission said in a statement on its website on Friday.
The statement said no more than five percent of the net assets of each fund product is allowed to be invested in one stock.
It added each investor will need at least 300,000 yuan, or the equivalent in foreign currency, to buy such money management products.
Analysts said the measure would help to rein in the growth of China's foreign exchange reserves that already total 1.2 trillion U.S. dollars, which have resulted in excessive liquidity and the flooding of the domestic stock markets.
According to the statement, the commercial banks are still banned from investing in commodity derivatives, hedge funds and securities rated below a BBB investment grade rating.
In China, individuals are banned from investing directly in overseas financial markets.
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