As a part of its plan to globalize RMB, China has granted the second renminbi qualified foreign institutional investor (RQFII) license in the week to Nikko Asset Management Asia.
Earlier on 26 May, the China Securities Regulatory Commission (CSRC) awarded the similar license to Singapore government owned Fullerton Fund.
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Nikko is seeking opportunities in China onshore bonds for the next six to 12 months with the secured status that authorizes the company to leverage the large pools of offshore RMB funds for more efficient access to China’s onshore capital markets.
Also, the license will allow the average Singapore investors to purchase retail unit trusts by investing into a portfolio of China on-shore bonds and/or China A-shares.
Nikko Asset Management Asia product development and management head Phillip Yeo was quoted by International Adviser as saying the firm is intending at $200m in its maiden RQFII product and is targeting $800m to $1bn across three-five products over the next three to five years.
Nikko Asset Management Asia president Eleanor Seet said: "The attainment of the RQFII license is a strong affirmation of our strength in the RMB bond market of which we were an early entrant in 2010.
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By GlobalData"This strategic development allows Nikko AM to provide retail investors with access to the domestic capital markets in China and expand our repertoire of innovative investment solutions."
China is laying out plans to expand RMB reach with RQFII scheme introduced beyond Hong Kong in London, Singapore, and Taiwan markets.
