The FT reports:
China is to impose a quota on investments by its citizens on the Hong Kong stock market – a decision that will reduce capital outflows to a small proportion of the $100bn-plus forecast when the outward investment scheme was announced last month.
Liu Mingkang, chairman of the China Banking Regulatory Commission, said there would be no limit on investments by individuals. But he said there would be tight controls on the total amount invested through the scheme.
Mr Liu said there would be a “quota in general” and when that was reached, the State Administration of Foreign Exchange would reassess the activity in the market.
“They can lift and readjust the quota if necessary and appropriate – it's a flexible ceiling,” he told the Financial Times.
It was the first mention from Beijing of a quota on its plan to allow individuals to invest in overseas stocks. Chinese officials refused to disclose the level of the quota but it is reckoned to be lower than anticipated by the Hong Kong market, which has soared in anticipation of a flood of mainland Chinese money.
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