The Hospital Authority Provident Fund Scheme, the second-largest pension fund in Hong Kong by asset size, has received approval to invest in mainland markets.
The scheme, which manages HK$42.3 billion worth of pension monies for 33,000 full-time staff at 41 hospitals and 123 clinics run by the Hospital Authority, was cleared in January by the China Securities Regulatory Commission (CSRC) to receive an expected US$100 million quota as part of the qualified foreign institutional investors (QFII) scheme to invest in mainland stock markets.
It is now waiting for the State Administration of Foreign Exchange (Safe), China's foreign currency regulator, to grant the quota. Foreign investors issued with QFII licences by the CSRC still need to apply for investment quotas from Safe to buy Chinese A shares or listed bonds.
The provident fund's trustee chairman John Lee Luen-wai (pictured) said the CSRC's acceptance of investment by big pension funds showed that China was interested in the longer-term view.
'Hospital Authority Provident Fund and other pension funds are eyeing long-term investment instead of betting on short-term gains. The CSRC's move granting the QFII quota to us and other big provident funds shows the regulator wants to see more long-term investors investing in the A-share market,' Lee said last week.
China does not allow overseas investors to freely trade in its bonds or stocks markets. However, the QFII scheme was launched in 2003 to grant big Western financial institutions quotas that allowed them to trade shares in the A-share market and listed bonds in the Shanghai or Shenzhen markets.