China expands the access of foreigners to trade genevie A-shares

© RIA Novosti / Alexander Demyanchuka in photobacteria banknotes in denominations of 100, 50, 20,10 and 5 yuan. Archival photoChina expands the access of foreigners to trade genevie A-shares© RIA Novosti / Alexander Demyanchuka the image Bank

The new rules extend the access of foreigners to trade genevie A-shares, which are traded on the Shanghai and Shenzhen stock exchanges, come into effect on Saturday.

The monitoring Committee for securities of China in August adopted amendments that expand the range of foreign individuals who may be eligible to open accounts to trade genevie A-shares. According to experts, their total number could reach one million people.

Earlier, the Chinese securities regulator allowed only a very narrow category of foreign private investors to open brokerage accounts in China. To such persons were foreigners with permanent residence permit in mainland China and living in China, the foreign companies whose shares were quoted on the Shanghai and Shenzhen stock exchanges.

Now apply for opening an account for depositing and accounting for A-shares is open to all foreigners working in China, but under the condition that the regulating bodies of their countries established a mechanism of cooperation agreed by the standards Committee to regulate China’s securities.

Access to A-shares has expanded in relation to foreign employees of companies whose shares are listed on Chinese stock exchanges, due to such employees who are not in China.

According to the chief investment strategist ITI Capital Iskander Lutsk, expansion of access of foreign citizens to the Shanghai and Shenzhen stock exchanges will open to Russian investors new opportunities to diversify investments from its Asian assets, this option will be in demand.

«Now investors will have another opportunity to invest in Asian currency. I think it will be a demand from Russian non-residents. Recently, a very active phase of rapprochement between China and Russia, including amid pressure from the US to country. Opens new opportunities for cooperation and to avoid sanctions, so it is possible the flow of funds into Chinese assets,» — said Lutsky RIA Novosti.

The portfolio Manager of new York’s Principal Investors Kyle Shostak, in turn, said that the measure of the Chinese authorities is an important step in the liberalization of the stock market of the country. In his opinion, the liberalization of the Chinese market in terms of trade war between China and the United States can give additional stimulus to support the economy of the PRC.

«They admit is not yet any investor, but it is a road map. The Chinese regulator continues to be gradually opens its market. But still this is great progress. While this is the expats in companies like Syntec. But the Chinese authorities are interested in attracting foreign investment in its stock market, albeit a controlled way and very gradually so as not to create a bubble,» said Shostak RIA Novosti.

Shostak explained that «liberalization of stock market has been one of the main requirements of the world trade organization. China was, in this sense, under great pressure from the International monetary Fund, the world Bank, the us administration — because Americans are the major foreign investors in the Chinese market.»