StanChart urges Thai customers to seize China’s RQFII
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STANDARD Chartered Bank (Thai) is encouraging its commercial and institutional customers to seize the opportunity presented by the opening of direct access to the onshore securities market in China as renminbi qualified foreign institutional investors.
China has granted a 50-billion-yuan (Bt273 billion) quota to Thailand to invest in yuan-denominated securities in China under the RQFII programme, Yuthadej Putamanonda, managing director and head of transaction banking, said yesterday. That indicates the deepening of financial cooperation between Thailand and China, which investors should welcome and prepare to seize the benefits of this great opportunity, he said.
The programme’s flexibility has opened up the potential for interesting and innovative investment products for fund managers to create a new offshore product from onshore Chinese securities, Yuthadej said.
Numerous fast-growing, high-return industries in China previously not available offshore will now be available for international investors.
With the latest announcement of RQFII quotas, a total of 1.21 trillion yuan has been granted to 16 jurisdictions, and about 450 billion yuan has already been allocated to 156 licensees.
Standard Chartered is the first bank to facilitate RQFII approval for a sovereign wealth fund and completed the first Luxembourg UCITS (Undertakings for Collective Invest-ments in Transferable Secur-ities) RQFII Structure last year.
“China will remain a major economic player and should account for about 25 per cent of global growth in 2020,” Yuthadej said. “China’s securities and currency markets are globalising at a tremendous pace. We expect considerable long-term demand for access to China from global investment managers.
“Thailand’s fund industry has the skills and capabilities to facilitate this access in providing products both locally and through the Asean funds passport. This aligns Thailand with other leading asset management centres around the world.
“The RQFII quota for Thailand is just an example of a linkage with China around RMB internationalisation that can be further leveraged across other parts of the economy and is expected to promote broader financial linkages between Thailand and China.”
StanChart has the advantage and capability to help investors keen on using RQFII to access China securities markets, especially China’s interbank bond market, now the third largest bond market in the world, he said.
