Aberdeen Asset Management’s Asian unit has received a Renminbi Qualified Foreign Institutional Investor license (RQFII) and is planning to launch a China A share investment fund.
The license will enable Aberdeen to invest in Chinese securities using offshore yuan.
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In addition, Aberdeen has applied for a 600 million yuan (S$124.2 million) investment quota and its total allowance will be confirmed by the authorities in November.
The quota will be used to launch a China-A share fund that targets institutions such as private banks and discretionary fund managers in Europe.
Aberdeen said that it had previously mainly accessed the Chinese markets through Hong Kong companies and other non-mainland China companies amid corporate governance concerns.
The new fund launch will enable more onshore companies to meet its quality threshold.
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By GlobalDataHugh Young, managing director of Aberdeen Asia, said: "We could now pull together a portfolio of 20-25 stocks with which we would be comfortable, and with low cross-over with our existing fund.
