? ?
BIZCHINA / Center
Subprime crisis dampens QDII demand
By Wang Zhenghua (China Daily)
Updated: 2007-08-22 10:15
Related readings:
?Subprime crisis not a 'direct threat'
?HK feels subprime pinch
?Subprime rocks Shanghai boat
?JP Morgan: QDII to reach US$90b next year
Global capital markets, shaken up by US subprime mortgage woes, are
dampening China's demand for overseas investment through QDII products.
China Construction Bank, the only institution that regularly reveals the
performance of their products developed under the QDII (qualified
domestic institutional investors) scheme, said earlier that as of last
Friday the net asset value of a newly launched product lost a total of
5.91 percent during the past three weeks.
In a notice posted on its website, China Construction Bank, one of the
Big Four Chinese lenders, said that the per unit net asset value for its
Haiying No 1 fund stood at 0.9534 yuan on August 14, down from 1 yuan at
issuance. It attributed the decline mainly to the 58 percent investment
in the Pacific High Dividend Equity Fund, which has slumped.
The bank reminded clients of the risks associated with bearish global
equity markets. Other banks declined to comment on the QDII issue.
Analysts said that nearly all QDII products that invest in overseas
shares managed by various qualified institutions have suffered losses
because of the worldwide stock market slump.
This has dealt a heavy blow to investors. But there are those who hold
the view that the past week's share price slide has provided an
opportunity for QDII funds to buy low.
Nevertheless, the poor performance of QDII stock funds has generally made
it more difficult for the managing institutions to attract new
investments, at least for the time being. The prospect of further
renminbi appreciation has made QDII funds look even less attractive.
"Many people, who were excited when they had the new channel to invest
overseas, are severely upset by the recent setback," said He Rongtian, an
analyst with Guangfa Securities.
While global markets have suffered, China's booming stock market has been
little affected by the global credit squeeze. Some analysts believe that
given Chinese companies' strong earnings in the first half of the year,
the index could climb in coming weeks to a new resistance level of 5,000
points.
Zhou Liang, research head of Lipper China, a leading fund information
provider, said the products that have overseas investments are surely
affected in a negative way.
In May, the government allowed banks to invest in overseas shares,
extending from fixed-income and money market products.
A number of domestic banks and their overseas rivals, including HSBC,
Citibank and Standard Chartered Bank, have churned out new products that
invest in overseas stock markets.
"The rise in net asset values (of the QDII stock funds) generated in June
and July have been completely wiped out in the subprime crisis," Zhou
added.
But some analysts see a brighter side to the issue. Wu Feng, an analyst
at TX Investment Consulting, said: "The global market is expected to
continue the upward trend, and it is high time for institutional
investors to increase their holdings of overseas stocks."
(For more biz stories, please visit Industry Updates)
Learn Chinese
No comments:
Post a Comment