Deutche Bourse venture may include derivatives

    THE China-Deutsche Bourse joint venture could be expanded to include derivatives, a spokesperson for China’s securities regulator said Friday at a press conference.

    Deutsche Bourse last week sealed a joint venture with the Shanghai Stock Exchange and the China Financial Futures Exchange to sell licensing rights for yuan-denominated investment products based on Chinese benchmark market indices in Europe. Dubbed China Europe International Exchange, the joint venture will start operations in the fourth quarter of the year. The joint venture aims to ease European investors’ access to Chinese securities.

    QFII quota rises to US$74.47b in May

    THE outstanding amount of China’s U.S. dollar-denominated Qualified Foreign Institutional Investor (QFII) program rose to US$74.47 billion as of May 29 from US$73.6 billion at the end of April, China’s foreign exchange regulator said Friday.

    The QFII program was created years ago by China to allow foreigners to invest in Chinese capital markets.

    Funds cut equity allocations on correction fears

    CHINESE fund managers cut the proportion of their portfolios to be invested in stocks over the next three months as they fear a sharp correction may be imminent after the market’s torrid rally, a recent poll showed.

    Fund managers cut their suggested equity allocation for the next three months to 80.6 percent from 81.3 percent, according to a poll of eight China-based fund managers conducted last week. Funds also reduced their suggested bond allocation to 7.6 percent from 8.3 percent a month ago, but upped cash weightings to 11.8 percent from 10.5 percent in April. “New fund inflows have fueled the market’s bull run, but risks are accumulating in the process,” said a Shanghai-based fund manager, who declined to be identified. The market needs to consolidation before rising again, he said.

    Huarong denies making loan to Hanergy

    CHINA Huarong Asset Management Co., one of the country’s largest buyers of bad debt, said Friday it didn’t extend a US$200 million loan to clean energy producer Hanergy Holding Group or its subsidiaries.

    In a brief and carefully-worded statement, Huarong said it was making the announcement in response to media reports that Hanergy Group had pledged 795 million shares of its Hong Kong-listed subsidiary as collateral to borrow the funds.