By Zhu Xiyan (朱熹妍)
Economic Observer Online
May 15, 2012
Translated by Tang Xiangyang
Original article: [Chinese]

The chairman of China’s stock market regulator has responded positively to a domestic securities company suggestion that certain mainland institutional investors should be allowed to purchase Hong Kong stocks, the Ming Pao Daily reported Tuesday.  

China’s scheme for Qualified Direct Institutional Investors (QDII) sets a quota for their offshore investors, and over $50 billion of this is still unused. It’s expected that 400 billion Hong Kong Dollars will flow into the stock market if these investors are allowed to buy equities there. 

The Ming Pao Daily reported that the chairman of the China Securities Regulatory Committee, Guo Shuqing, was receptive to the proposal, which it called a “special QDII.”

Though the CSRC hasn’t publicly approved the proposal, some unnamed sources said that it was in line with the “future plans” of the CSRC.

The Chinese securities company said that the CSRC didn’t mention when it would give a green light to the “special QDII,” but predicted that it might come in July.

The program would target mainland professional investors with total assets above a certain threshold.

At 14:15, Hong Kong’s Hang Seng Index was trading up 0.7% at at 19867.15.