China halts approvals for some HK stock funds
Officials to reduce risk in the country’s financial markets
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