TOKYO, June 25 (NNN-KUNA) -- Qatar's sovereign wealth fund is applying for the status of Qualified Foreign Institutional Investor (QFII) in mainland China's capital market and aims for an investment quota of USD 5 billion, state-run Xinhua News Agency reported.
Qatari Energy and Industry Minister Mohammed Bin Saleh Al-Sada said during his trip in Beijing that by applying for the QFII status, Qatar Investment Authority plans to invest part of its revenues generated from transferring gas to China in Chinese shares and initial public offerings (IPOs), according to Xinhua.
Liquefied natural gas transported from Qatar to China amounts to 5 million tons annually.
"The decision, which has received positive responses from China, is out of recognition of the strength and prospect of the Chinese economy," Al-Sada was quoted as saying.
He said the current disappointing performance in China's A-share market will be short-lived and Qatar is eyeing China's long-term growth potential for strategic investments.
Launched in 2002, the QFII is one of the few channels for overseas investors to trade in China's domestically listed yuan-denominated A-share market within given quotas. The quota that Qatar proposed far exceeded the current cap of USD 1 billion.
Last December, the Kuwait Investment Authority (KIA) received QFII status, becoming the second qualified Middle Eastern fund after the Abu Dhabi Investment Authority.
With an increasing number of foreign investors showing interest in China's A-share market, China's top securities regulator had quickened its pace to further open its capital market, the report said.
Earlier this month, the China Securities Regulatory Commission cut the asset requirements for foreign institutions wanting to invest in its stock markets and allowed the QFIIs to hold up to a 30-per cent stake in a listed company.
The commission has also quickened QFII approvals recently to encourage foreign investors who held long-term investment plans.