Temasek unit joins $1.5bn QFII club

Temasek Fullerton Alpha Investments has become the third institution to receive more than $1 billion in qualified foreign institutional investor quota from China’s State Administration of Foreign Exchange (Safe).

The unit of Singaporean state investor Temasek won $500 million in QFII quota in Safe's October handouts, bringing its total quota to $1.5 billion.

The Hong Kong Monetary Authority (HKMA) was the first to pass the $1 billion mark in August, then came Norway’s central bank, Norges Bank, one month later.

Safe removed the $1 billion cap for QFII holders in December, but it took eight months before a foreign institution exceeded that amount. It only removed the cap for sovereign funds and central banks, which China gives priority, as long-term investors.

Other asset owners expected to surpass the $1 billion mark include Abu Dhabi Investment Authority, Bank Negara Malaysia, Kuwait Investment Authority and Singapore's GIC.

Other QFII recipients in October were Singapore-based Flowering Tree Investment Management, which received $80 million. US firms Newport Asia and Alta Advisers, along with Swedish firm East Capital and Hong Kong-based Pacific Alliance Investment Management, each received $100 million. Taiwan’s Fubon Insurance Company was awarded $50 million.

But there were also QFII withdrawals last month. Safe requested that HSBC Global Asset Management’s Hong Kong branch return $10 million of QFII quota, likely because it had not invested the capital. This is the second time the firm has had to return QFII quota, after it gave back $18 million in January. HSBC did not have a response by press time.

Safe has awarded $48.5 billion in QFII quota to 222 licence holders since the programme launched in 2003.

Separately, Bosera Asset Management obtained Rmb1.5 billion ($246 million) of additional renminbi-denominated QFII quota in October, on top of the Rmb2 billion it received in May. Market participants expect Bosera to launch an RQFII exchange-traded fund tracking the FTSE A50.

Other October RQFII winners include Bank of East Asia and China Orient International Asset Management, which each received Rmb1 billion. South China Asset Management and Orient Finance Holdings were each granted Rmb500 million. Hong Kong fund house Value Partners got Rmb800 million, which it plans to use for an A-share fund.

For the month of October, Safe granted Rmb15.3 billion to 47 RQFII holders.

In addition, Sunshine Insurance received $1.2 billion in qualified domestic institutional investor (QDII) quota last month. The QDII scheme allows onshore investors to invest in foreign markets.