BNY Mellon gets QFII licence for China capital mkts

By Samuel Shen and Jacqueline Wong

SHANGHAI, Feb 1 (BestGrowthStock) – BNY Mellon Asset Management
International Ltd, the world’s 11th largest fund manager, said on
Monday it has been awarded a licence to invest in Chinese stocks
and bonds, giving it access to the country’s fast-growing capital
markets.

BNY Mellon, a unit of the Bank of New York Mellon Corp
(BK.N: ), has obtained approval from the China Securities
Regulatory Commission (CSRC) to buy yuan-denominated securities
under the Qualified Foreign Institutional Investor (QFII) scheme,
the company said in an e-mailed statement.

BNY Mellon is currently seeking regulatory approval for an
initial investment quota.

“Global investors cannot afford to ignore the investment
potential of China,” BNY Mellon’s Asia chief executive officer
David Jiang said in the statement.

“With a vast number of Chinese companies now cash rich, we
expect merger and acquisition activity to continue, which may
provide further support to share price valuations. China has been
particularly active on this front.”

China’s stock market (.SSEC: ) jumped 80 percent in 2009 as one
of the world’s best performing indexes, but has lost steam
recently in response to government tightening aimed at curbing
asset price bubbles fuelled by last year’s massive stimulus and
lending spree.

Despite potential risks of investing in Chinese stocks now,
foreign investors are still keen to put money in.

UBS AG’s (UBSN.VX: ) $800 million QFII quotas are short of
demand, and the Swiss bank will soon apply for more to invest in
China’s capital markets, UBS China head of equities Nicole Yuan
said on Jan. 18.

China launched the QFII programme in 2003 to allow foreign
institutions to invest in yuan-denominated stocks and bonds, and
had granted a combined quota of $16.67 billion to 86 overseas
investors by the end of 2009, according to the official Shanghai
Securities News.

Getting the QFII licence is also part of BNY Mellon’s
long-term China strategy. The company is currently waiting for
regulatory approval for an asset-management venture with China’s
Western Securities Co, seeking to tap the country’s $380 billion
mutual fund industry.

The planned venture, BNY Mellon Western Fund Management
Company Limited, will initially manage domestic Chinese
securities in a range of local retail fund products, the company
said.

Investing
($1=6.83 Yuan)
(Reporting by Samuel Shen; Editing by Jacqueline Wong)

BNY Mellon gets QFII licence for China capital mkts