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The move may gave some support to the
cross-border trading scheme, which has seen dwindling interest
from investors.
Up until now, Chinese mutual funds have been able to invest in
overseas markets only through the Qualified Domestic
Institutional Investor (QDII) program, which requires regulatory
approval.
Giving mainland funds access to Hong Kong shares via the
Shanghai-Hong Kong Stock Connect will promote product and
business innovation, and be good for steady development of the
connect scheme, Deng Ge, spokesman for the China Securities
Regulatory Commission (CSRC), told a news conference in Beijing.
The scheme, launched late last year, allows Hong Kong and
mainland investors to invest in each other's markets up to a
daily quota.
Interest in the scheme has been waning. On Friday, mainland
investors used only 5 percent of their quota for Hong Kong
shares, while those in Hong Kong utilized only 2 percent of what
they could buy on the mainland.
Chinese investors have shown little enthusiasm toward the scheme
because investing in Hong Kong shares gives them little asset
diversification, but expose them to foreign exchange risks.
Recent bullishness in the mainland stock markets has also made
Hong Kong shares less attractive. China-listed companies are on
average 35 percent more expensive than their Hong Kong peers,
the biggest premium in three and a half years.
(Reporting by Zhang Xiaochong and John Ruwitch; Writing by
Samuel Shen; Editing by Richard Borsuk)
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