CSOP fund seeks higher yuan quota to satisfy global demand
London -listed ETF, popular among European investors, seen as a milestone in Beijing's efforts to promote the currency
CSOP Asset Management, the biggest renminbi qualified foreign institutional investor, is applying for a higher yuan quota to tap growing global demand for Chinese assets as the authorities relax investment restrictions.
The Hong Kong-based asset manager has submitted an application to mainland authorities to allow more investors to subscribe to its newly listed exchange traded fund, the CSOP FTSE China A50 UCITS ETF.
The fund, which tracks the performance of A shares, was heavily subscribed to in London this month, said Ding Chen, CSOP chief executive, without disclosing the size of the additional quota being sought.
On Friday, the asset manager was granted a 2 billion yuan (HK$2.56 billion) quota to launch an ETF to invest in an onshore government bond. The ETF will be listed on the Hong Kong stock exchange after the Lunar New Year.
"Almost every foreign investor has been holding an underweight position in Chinese assets. China indices have not really integrated into international benchmarks," Ding said. "That means this market's potential to grow is huge."
The company's London-listed ETF was seen as a milestone in Beijing's effort to promote internationalisation of the yuan, as the product offers European investors their first direct access to A shares.
The fund, which listed on the London Stock Exchange on January 9, was granted a quota of 1.5 billion yuan. By Friday, up to 97 per cent of the fund was subscribed.