China shares up on prospect of foreign investment

<p>Speculation there will be increased investment in mainland markets has seen the Hong Kong market move higher. </p>

China shares were boosted by the prospect of greater foreign investment in the country, causing them to enjoy their best day in more than a week today (May 3rd).

Following reports by Shanghai Security News that the renminbi qualified foreign institutional investors (RQFII) quota approvals are set to be resumed after being suspended for two months, the country's two major indexes made gains.

The CSI300 closed 1.8 per cent higher, while the Shanghai Composite Index advanced by 1.4 per cent. As a result, the indexes recorded weekly rises of 1.9 per cent and 1.3 per cent respectively.

The move toward reinstating RQFII quotas comes after the Chinese central bank implemented new technical regulations.

Jackson Wong, Tanrich Securities' vice-president for equity sales, told Reuters: "People are anticipating about 200 billion yuan of unused RQFII quota could be deployed."

As a result of this news, financial stocks were the biggest positive influence to the onshore indexes.

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