China raises quota for foreign shares

SHANGHAI - The Associated Press

Employees work at a shoe plant in Dongkou county, Hunan province yesterday. REUTERS photo

China has raised its quota for stock investments by foreign institutional investors in a move toward easing controls on overseas capital in its tightly regulated domestic share markets.

The China Securities Regulatory Commission announced Thursday that it was more than doubling the current annual quota, by $50 billion, to $80 billion.

Regulators have struggled to stir interest among investors in the local currency denominated, or “A-share” market, which has languished for years after hitting a peak in 2007.

The qualified foreign institutional investors program is the only legal way for foreign investors to buy shares in the mainstream yuan-denominated market. The news buoyed Chinese shares, with the benchmark Shanghai Composite Index jumping 1.7 percent to 2,302.24.