Foreign investors eye futures market
(Xinhua)Updated: 2007-02-26 10:00
Goldman Sachs Gaohua Securities Co., Ltd is reportedly to be seeking potential partners among Chinese futures companies as well, so that its clients can invest in stock index futures in the future.
Morgan Stanley, which once held a major stake in China International Capital Corporation (CICC), was also encouraging CICC to buy into futures companies.
According to sources with the Ministry of Commerce, some foreign investment has actually penetrated into the futures sector by holding stocks in Chinese futures companies, although the country bars foreign capital from the futures sector.
The industrial guiding catalog for foreign investment, currently being revised by the Ministry of Commerce, is likely to open the futures markets on certain conditions in certain areas, the China Business Newspaper report said.
A draft revision of regulations on futures trading recently approved by the country's State Council suggests that foreign investors may be allowed to acquire Chinese futures companies.
Originally, Hong Kong investment was allowed to have no more than 49 percent of a mainland futures company under CEPA (Closer economic Partnership Arrangement) between the Chinese mainland and Hong Kong and Macau to encourage free trade.
Foreign investors could only make a detour to merge and acquire mainland futures companies via its Hong Kong branch, as in the trial case of Galaxy Futures jointly established by the Hong Kong branch of ABN AMRO Bank and China Galaxy Securities Co.
Hong Kong investment still holds priority over foreign investment concerning
the M&A of mainland futures companies, but appears unattractive to those
companies.
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