China halts ap­provals for some HK stock funds

Of­fi­cials to re­duce risk in the coun­try’s fi­nan­cial mar­kets

The Star Malaysia - StarBiz - - Foreign News -

BEI­JING: China’s se­cu­ri­ties reg­u­la­tor is sus­pend­ing ap­provals for some mu­tual funds that plan to al­lo­cate at least 80% of their port­fo­lios to Hong Kong-traded stocks, ac­cord­ing to peo­ple briefed on the mat­ter.

While the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion has shelved ap­pli­ca­tions for such funds by some fund man­age­ment com­pa­nies, the re­view process for funds that aim to put less than 80% of their non-cash as­sets into stocks in Hong Kong con­tin­ues as usual, the peo­ple said, de­clin­ing to be named as the reg­u­la­tory guid­ance was not pub­lic.

The CSRC didn’t im­me­di­ately re­ply to a fax seek­ing com­ment.

Hong Kong shares fell on Tues­day amid concern Chi­nese reg­u­la­tors would limit the flow of main­land funds into the city’s stock mar­ket, af­ter the South China Morn­ing Post re­ported on the moves.

The Hang Seng In­dex fell 0.8% as of 1:36pm lo­cal time.

Chi­nese in­surer Ping An In­surance Group Co, which has more than dou­bled this year, fell 2.5%, while Ten­cent Hold­ings Ltd re­treated 1.9%.

Chi­nese of­fi­cials have stepped up a cam­paign to re­duce risk in the coun­try’s fi­nan­cial mar­kets, prompt­ing de­clines in bonds and eq­ui­ties.

While the bench­mark Shang­hai Com­pos­ite In­dex has ral­lied 7.2% this year, the gains are dwarfed by the 34% jump in the Hang Seng In­dex.

The Hong Kong gauge is one of the best per­form­ers in the world this year, buoyed by swelling in­flows from the main­land. — Bloomberg

Eq­ui­ties de­cline: The Hang Seng In­dex fell 0.8% with Ten­cent re­treat­ing 1.9%. — Reuters

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