South Korea's sovereign wealth fund has received qualified investor status from
China, opening the door for investment in its stock markets, the finance
ministry said Friday.
Korea Investment Corp. (KIC) received the status
of "qualified foreign institutional investor" (QFII) from the China Securities
Regulatory Commission, according to the ministry.
Under the Chinese
law, a foreign investor should obtain the QFII status to directly invest in its
mainland stock markets.
The approval comes more than a year after KIC
applied for the status in 2010, seeking to invest up to US$200 million in the
Chinese stock markets.
The sovereign fund can start investing in China
after receiving an investment quota from Chinese financial authorities, the
ministry said. It is expected to begin its investment there in the second
half.
Established in 2005, KIC manages a $42.9 billion fund from the
central bank's foreign exchange reserves and the finance ministry's foreign
exchange stabilization bonds. It reported an average yield of minus 3.3 percent
in 2011 mainly due to losses from its exposure to sluggish global stock
markets.