Singapore-listed China stocks rally after signing of QDII investment agreement
Chinese stocks that are traded in Singapore rallied Thursday after the Monetary Authority of Singapore and the China Banking Regulatory Commission signed an agreement to allow Chinese banks to offer their clients investment opportunities in Singapore under China's qualified domestic institutional investor (QDII) scheme
"I think they (Chinese investors) should find it quite attractive to invest in Singapore. Chinese companies listed here are the cream of the crop since they adhere to stricter listing rules," said Kim Eng Securities analyst Gregory Yap
While this should be positive, Yap said he is not expecting an immediate dramatic impact since China plans to sign similar accords with securities regulators in US, Germany and Japan. So far, China has signed QDII pacts with Hong Kong and the UK
UBS also doubts that Chinese banks will rush to buy shares in Singapore
"This is hardly an environment for a rush of Chinese banks' funds into the Singapore market. Having said that, this will likely be a short term catalyst for a big bounce in oversold S-chips (Chinese stocks listed in Singapore)," said UBS research head Tan Min Lan in a note to clients Among big cap Chinese stocks, Tan said she believes that Cosco Corp Singapore, Yangzijiang Shipbuilding, sports shoemaker China Hongxing and Synear Food are oversold considering these shares have fallen between 40 and 50 percent in the last three months. At 12.15 pm (0415 GMT), the FTSE ST China index was up 8 percent at 568.67. The index was introduced on January 10 by the Singapore Exchange as part of a revamp of local stock market indices. The index represents 50 out of the more than 100 Chinese stocks listed in Singapore
Shipbuilder and shipping company Cosco was up 12.4 percent at 4.72 Singapore dollars, Yangzijiang was up 10.4 percent at 1.38 dollars, China Hongxing was 12.7 percent higher at 71 cents and Synear Food was up 15.2 percent at 1.21 dollars
Mobile phone maker Longcheer Holdings rose 14 percent to 48.5 cents
