TAIPEI, Dec 4 (Reuters) - The Taiwan Cabinet said on Thursday it will open its local stock and futures markets to qualified direct institutional investors (QDII) from China, in its latest bid to prop up the sagging stock market.
The move, which was widely expected, comes as part of the government's package to boost stocks and stimulate the depressed economy.
The new plan could allow up to US$1.125 billion from QDIIs into the stock market, according to estimates from industry observers.
'We hope the implementation of this measure will attract more foreign investments ... boding well for Taiwan to become a regional asset management and funding centre,' Premier Liu Chao-shiuan said in a statement following a weekly meeting.
But observers said they did not expect the QDII funds, used by big mainland Chinese banks and other institutional buyers, to buy Taiwan stocks anytime soon until China sets up a framework officially allowing such investment.
Taiwan's broader market has lost more than half of its value since peaking in May, reflecting a global sell-off stemming from the global financial crisis.
In a separate bid to boost the economy, Taiwan's top financial regulator on Thursday said it will propose allowing the government-owned postal bank to put some of its deposits in private banks to spur more lending.
In afternoon trade, Taiwan's main index had fallen 2.09 percent to 4,217.28 points.
(Reporting by Faith Hung; Editing by Ken Wills) Keywords: TAIWAN CHINA/QDII (faith.hung@thomsonreuters.com; Reuters Messaging: faith.hung.reutersw.com@reuters.net; +886 2 2508 0815) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The move, which was widely expected, comes as part of the government's package to boost stocks and stimulate the depressed economy.
The new plan could allow up to US$1.125 billion from QDIIs into the stock market, according to estimates from industry observers.
'We hope the implementation of this measure will attract more foreign investments ... boding well for Taiwan to become a regional asset management and funding centre,' Premier Liu Chao-shiuan said in a statement following a weekly meeting.
But observers said they did not expect the QDII funds, used by big mainland Chinese banks and other institutional buyers, to buy Taiwan stocks anytime soon until China sets up a framework officially allowing such investment.
Taiwan's broader market has lost more than half of its value since peaking in May, reflecting a global sell-off stemming from the global financial crisis.
In a separate bid to boost the economy, Taiwan's top financial regulator on Thursday said it will propose allowing the government-owned postal bank to put some of its deposits in private banks to spur more lending.
In afternoon trade, Taiwan's main index had fallen 2.09 percent to 4,217.28 points.
(Reporting by Faith Hung; Editing by Ken Wills) Keywords: TAIWAN CHINA/QDII (faith.hung@thomsonreuters.com; Reuters Messaging: faith.hung.reutersw.com@reuters.net; +886 2 2508 0815) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2008 AFX News
