South Korea's sovereign wealth fund has received a regulated quota of US$200
million to invest in China's stock and bond markets, officials said
Tuesday.
Korea Investment Corp. (KIC) received the investment quota
from the Chinese State Administration of Foreign Exchange about three months
after it was granted a license to join China's qualified foreign institutional
investor (QFII) program, a source at the company said.
The company
will complete its preparation for trading in Chinese securities by April, he
said.
In December last year, the sovereign fund earned approval from the
China Securities Regulatory Commission to invest in yuan-denominated stocks and
bonds.
Those securities issued by mainland China-based companies in
the financial markets of Shanghai and Shenzhen are generally only available for
purchase by Chinese nationals.
Foreign investment in the
Chinese-currency based bonds and shares, called A-shares, is only allowed
through a tightly-regulated structure under the QFII system.
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.
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