Shanghai Stock Exchange Raises Shareholding Cap for Foreign Investors; Foreigners Can Now Collectively Own 30% in a Single Firm

March 28, 2014 Leave a comment

Shanghai Stock Exchange Raises Shareholding Cap for Foreign Investors
Foreigners Can Now Collectively Own 30% in a Single Firm
CHAO DENG
March 19, 2014 11:16 p.m. ET
SHANGHAI—The Shanghai Stock Exchange is easing restrictions on overseas investors, giving them more flexibility to invest in China’s tightly controlled capital markets.
With immediate effect, foreign investors can collectively own up to 30% in a single company, up from 20%, according to a statement on the exchange’s website on Wednesday. If foreign investors’ collective shareholding in a company exceeds 26%, the stock exchange will make a relevant announcement on the following trading day.
The cap on ownership in a company by an individual foreign investor remains at 10%.
The exchange also said that foreigners will be able to trade asset-backed securities.
Foreign investors currently buy Chinese stocks and bonds through the Qualified Foreign Institutional Investor and the Renminbi Qualified Foreign Institutional Investor programs. Both have expanded in recent years, giving foreigners greater quotas for investing on the mainland, although their ownership remains a fraction of China’s overall market.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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