SHANGHAI May 23 Swiss private bank Julius Baer said on Monday that it had received a government quota of $100 million to invest in Chinese securities and will launch a China fund to give its clients exposure to the world's fastest-growing major economy.
The QFII quota, granted by the State Administration of Foreign Exchange (SAFE), China's currency regulator, would allow Julius Baer to buy Chinese stocks and bonds under the Qualified Foreign Institutional Investor (QFII) scheme.
"We are in a unique position as a private bank to provide our clients with the opportunity to invest directly onshore in China, a market which is growing rapidly and offers so many interesting options for investors," Kenneth Ho, Head of Products Asia Pacific, said in a statement.
"This (the QFII quota) opens up increased opportunities for diversification and potentially attractive long-term returns."
Since 2003, China has granted a combined QFII quota of about $20 billion to more than 100 foreign institutions including UBS , Goldman Sachs , Morgan Stanley and Citigroup , giving them access to China's strictly controlled capital markets.
Zurich-based Julius Baer, which counts Switzerland and Asia as its two home markets, said it plans to launch a China fund that would invest in Chinese companies listed in Hong Kong as well as in mainland China.
"Until now, clients have had very limited direct access to this trend (of investing in China), since few China stocks have overseas listings - we can now offer clients a full range of products either directly from Julius Baer or from numerous external parties," the bank said.
Julius Baer is stepping up efforts to expand in Asia, especially China, seeking to benefit from China's growth and the rising status of the Chinese currency.
In March, Julius Baer expanded its offshore yuan product offerings, adding yuan conversion service, savings and deposit accounts and yuan-denominated or currency-linked investment products in Hong Kong and Singapore.
Julius Baer's Hong Kong operation was promoted into a full bank branch late last year and the bank plans to open its Shanghai representative office and Singapore Trust company this year. (Reporting by Samuel Shen and Jacqueline Wong)