Chinese investors get green light to buy Taiwan stocks

Taiwan is to allow Chinese investors to participate in the island’s stock and futures markets from October, the Wall Street Journal reported. It will also permit firms with Chinese shareholders to list on Taiwan’s stock exchange. According to Wu Tang-chieh, vice chairman of Taiwan’s Financial Supervisory Committee, investments will be made under China’s Qualified Domestic Institutional Investor (QDII) program, through which banks, fund managers and insurers invest in overseas securities on behalf of their mainland customers. Taiwan’s cabinet estimates that as much as US$1.13 billion could enter its securities market immediately via mainland fund managers. If the two sides sign a formal memorandum of understating, this amount could triple. Taiwan’s key stock index has fallen 17% so far this year.