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China to authorize QFII investment in stock-index futures (2) |
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21:31, August 16, 2007 |
Ke said if the market plunged, "the only option" under current policies was to sell yuan-denominated shares to avoid losses, which undermined the strategy to hold shares so as to profit from yuan appreciation.
Fang believed that foreign institutional investors would mainly use stock-index futures as a hedging tool. "They will be very cautious, and avoid risky short-selling practices," said Fang.
Chen Changhua, head of the China Research Department for Credit Suisse, said fears of QFII participation in the stock-index futures trade were groundless because the quota largely restricted their influence.
Even with its expansion, the total QFII fund was still below 30 billion dollars, a small sum if measured against the Shanghai and Shenzhen bourses with a market value of more than 20 trillion yuan (2.6 trillion U.S. dollars), said Chen.
Source: Xinhua
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