China Warehouse- More Than Crockery Message Board

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Strategies & Market Trends : China Warehouse- More Than Crockery

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To: RealMuLan who wrote (1914)	12/11/2003 2:42:44 PM
From: RealMuLan	Read Replies (1) of 6370

Money-market funds to be launched in China By Shen Yiming Published: December 11 2003 12:28 \| Last Updated: December 11 2003 12:28 Three Chinese fund management companies won long-awaited approval to launch a type of US-style mutual fund that invests only in money market instruments, an area currently dominated by banks. The money market funds, which are more liquid than existing funds and more attractive than low-yielding bank deposits, will give a needed boost to China's funds industry, which has suffered from a large outflow of money in the past year. In the long term, the funds could also pose a threat to small banks by increasing pressure on them to attract deposits and implement more flexible interest rates. The funds launched by Boshi, Hua'an and China Merchants will invest only in yuan-denominated short-term bonds with maturities of less than a year, bank deposits and repurchase agreements, or repos. But the new funds will not be able to invest in commercial bills, which are not available for investment in China. "They [the funds] are an alternative to deposits, and a haven for investors when the stock market is sluggish," said Lin Jie, an analyst for Shenyin Wanguo Securities. The go-ahead follows months of haggling between the regulators in the banking and securities sectors over which institutions should issue the new products. Earlier this year, a number of city commercial banks headed by Nanjing Commercial Bank jointly set up two quasi-money-market funds that invest in the inter-bank bond market. news.ft.com

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