Distribution begins for QFII quota expansion

After announcing in May it would raise the amount of money overseas institutions may invest in the nation's stocks and bonds to US$10 billion, Beijing has begun distributing US$6 billion worth of new qualified foreign institutional investor (QFII) quotas to foreign banks and fund managers. Hang Seng Bank, the first to acknowledge the increase in its investment quota, said the total amount it could invest in Chinese stocks and bonds had been doubled to US$100 million, according to the South China Morning Post. The most recent data show that at the end of March, QFII quota holders had only invested about US$1 billion in equities, with the rest mostly in government bonds and yuan bank accounts.