A senior Qatari official said investment authorities are applying for the status of Qualified Foreign Institutional Investor (QFII) in China with an aim to seek investment quota of $5 billion.
Mohammed Bin Saleh Al-Sada, minister of energy and industry of Qatar, said that by applying for the QFII status, the gas-rich nation plans to invest part of its revenues generated from transferring gas to China in Chinese shares and IPOs.
Qatar annually exports 5 million tonnes of liquified natural gas (LNG) to China.
Sada said the initiative has received a positive response from China. He added that the current disappointing performance in China’s A-share market will be short-lived and assured his country is eyeing China’s long-term growth potential for strategic investments.
QFII, launched in 2002, is one of the few channels for overseas investors to trade in the A-share market within given quotas. Qatar’s proposed quota far exceeded the current cap of $1 billion.
China’s regulator had quickened its pace to further open its capital market given the increasing interest shown by number of foreign investors in the country’s A-share market.
China Securities Regulatory Commission cut the asset requirements for foreign institutions wanting to invest in its stock markets earlier this month. They also allowed the QFIIs to hold up to a 30% stake in a listed company.
The commission has also quickened QFII approvals recently to encourage foreign investors who held long-term investment plans.
Foreign investment under the QFII program accounts for 1.1% of the total market value of domestic A-shares.