Chinese New Year officially ends this week, but for Hong
Kongbased Charles Wang, chief executive officer of
Chinese asset manager E Fund Management (HK), the weeklong
holiday was not restful at all.
That is because he and his team have been busy preparing for
the coming launch of a 1.1 billon yuan fund, which will be
among the first batch of renminbi-denominated mutual funds
approved by the Chinese government to be raised in Hong
With the new fund raisings, E Funds assets under
management double to nearly $400 million, which is not bad
considering that the Guangzhou-based asset manager set up shop
in Hong Kong in 2008. We see explosive growth in the
coming few years, Wang says, adding that the experiment,
also known as RMB Qualified Foreign Institutional Investor
scheme (RQFII), likely will be expanded with more quotas given
later this year.
E Fund is among a group of 21 mainland fund managers and
brokers that are kick-starting a Chinese-government experiment
allowing Chinese financial services companies to raise yuan
funds in Hong Kong for investing in mainland markets.
The scheme is the latest addition to Chinas renminbi
internationalization efforts. Chinese authorities have approved
the 21 firms to raise a combined 20 billion yuan in Hong
The launch of the new RQFII mutual funds comes only a few
months after Chinese Vice Premier Li Keqiang announced the
program during a speech at the University of Hong Kong in
Hong Kongs offshore RMB market is likely to heat up
this year. Officials from China Securities Regulatory
Commission announced at the Asian Financial Forum held in Hong
Kong in mid-January that they would be encouraging Chinese
companies to begin seeking yuan-denominated initial public
offerings in Hong Kong as well.
Hong Kong is an axis of capital, E Funds
Wang says, adding his RQFII mutual fund will have a
fixed-income theme, investing primarily in Chinese corporate
and government bonds. Many global players want access to
capital to Chinese
capital. Chinese financial players want access to global
capital. Hong Kong offers a competitive platform for Chinese
asset managers as well as global players.
Demand in Hong Kong for exposure to Chinese bonds and
equities comes despite the fact that Chinas CSI 300 index
fell 16 percent in 2011, the result of the governments
efforts to cool the economy and to prevent speculative
investments, particularly in real estate.