China eases inbound investment rules (ext: Edge)

BEIJING: China announced new draft rules on Friday on inbound portfolio investments, increasing the amount some institutions can invest in the country's stock markets, in a move likely to bolster market sentiment, according to Reuters on Sept 4.

The upward limit for individual institutions' quotas under the Qualified Foreign Institutional Investor (QFII) programme will be raised to US$1 billion from US$800 million under the draft rules, the State Administration of Foreign Exchange (SAFE) said.

The agency also said it would reduce the lock-up period for insurance funds, pension funds and open-ended China funds to three months from the one-year requirement others must follow.

Hong Kong's Hang Seng Index soared after the announcement on hopes of bigger capital inflows into China, ending up nearly 3 percent. The Shanghai stock exchange  had closed up 0.6 percent before the news.