THE China Securities Regulatory Commission has suspended approval of Hong Kong-focused mutual funds, according to the industry newspaper China Fund, potentially slowing the pace of mainland money into Hong Kong stocks. New funds with “Hong Kong” in their names — which rules dictate must allocate at least 80 percent of their portfolio into Hong Kong-listed stocks — have seen their approvals suspended by the securities regulator, China Fund said on its website, quoting two unidentified fund sources. The move could delay the launch of 59 products that are backed up in the queue, although funds that invest less than 50 percent of their portfolio in Hong Kong will not be affected, according to the newspaper, which is affiliated with the People’s Daily. The sources, who were notified by the securities regulator, said the body did not explain why it was suspending Hong Kong-focused funds. But they speculated that regulators may hope to cool fervor in a market that has soared over 30 percent this year, aided by mainland money inflows, according to the newspaper. China has stepped up a campaign to reduce risk in the country’s financial markets, prompting declines in bonds and equities. While the benchmark Shanghai Composite Index has rallied 7.2 percent this year, the gains are dwarfed by the 34 percent jump in the Hang Seng Index. (SD-Agencies) |