KUWAIT CITY: China's foreign exchange regulator has increased the amount which Kuwait's sovereign wealth fund can invest directly in the Chinese securities markets to $1 billion, state news agency KUNA reported yesterday.
The regulator awarded Kuwait an additional $700 million quota on top of $300m awarded in March last year. Kuwait said last year that it was seeking a maximum quota of $1bn.
The quota allows the fund to buy yuan-denominated stocks and bonds. Only five other foreign investors in China have quotas as large as $1bn. They are Qatar Holding, the Hong Kong Monetary Authority, Norway's Norges Bank, Government of Singapore Investment Corporation and Singapore-based investment firm Temasek Fullerton.
Chinese officials were not immediately available to comment on the KUNA report. But Guo Shuqing, chairman of the China Securities Regulatory Commission, indicated last week that authorities would continue to open up channels for overseas fund inflows into China, lifting sentiment in the local stock market.
Kuwait has a sovereign wealth fund managing assets well in excess of $300bn. The fund said last October that its investments in greater China, including Hong Kong, had grown to $15bn.
While Gulf funds have historically preferred to invest in Europe, many are expected to boost investment in Asia as growth in the West slows and commercial ties deepen between the regions.