A recent hot topic in the China market is the easing of QFII investment rules by the Chinese government that will come into effect on 1 September. The object is to attract more non-speculative overseas investment to the stock markets.
So far, more than 40 banks and asset managers have obtained permission under the QFII scheme to invest over 7 billion US dollars.
Summary of major changes
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Halves the asset requirements for the scheme from USD 10 billion to USD 5 billion with an exception of securities firms and commercial banks which will remain unchanged.
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Investors will also be allowed to repatriate their funds sooner than the present 3 months to one year lock up period.
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Quota of foreign investment in the Chinese stock markets will also be raised.
This is believed to have major impact on China themed funds as well as China A-shares. Already many stocks has reacted positively to the news.
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Since the Word Cup started 2 weeks ago, the stockmarkets all around had been in a doldrums and directionless.
The long term in the Straits Time Index
A lot had been said of the value of by and hold in the long term. Many investment book in the market talk about the US market, so the example commonly encountered is the Dow Jones Industrial Average (DJIA).
Take a look at this long term chart:
The continuous long term up trend is easy to see. Despite some major interruptions the buy and hold strategy offered excellent rewards over the years. (If one had brought during the peak of 1930, it would have taken over 25 years to recover the initial capital),
How about the Singapore market? Take a look at the Strait Times Index (STI).
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