HONG KONG (XFN-ASIA) - Share prices closed sharply higher as fresh funds from mainland China started to flow into the local market following the announcement that mainland banks and funds are now allowed to buy overseas stocks under the mainland's revised investment laws, dealers said.
Buying was across the board in heavy turnover, about a third of which is estimated to be due to fresh cash from mainland Chinese banks and institutional funds, they said.
The China Banking Regulatory Commission (CBRC) said on Friday it has removed equity investment restrictions on domestic banks, which under the Qualified Domestic Instutional Investor (QDII) scheme were not allowed to directly invest in offshore stock markets.
It is expected that the new regulations will broaden the scope of the QDII scheme and benefit especially Hong Kong blue chips and China-related stocks, dealers said.
The Hang Seng Index closed up 511.03 points or 2.50 pct at a new closing high of 20,979.24, off a session high of 21,065.59 and a low of 20,870.01. The previous record close was hit on May 7, at 20,896.64.
Today's turnover was 94.99 bln hkd.
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