China's Bosera fund firm wins $1 bln QDII quota

SHANGHAI, Nov 20 - China's State Administration of Foreign Exchange has issued a $1 billion quota to Bosera Fund Management Co under China's Qualified Domestic Institutional Investor (QDII) scheme, which allows Chinese institutions to invest in foreign capital markets on behalf of clients.

Bosera had also applied to the China Securities Regulatory Commission to set up a non-index mutual fund to invest overseas and was waiting for approval, a Bosera marketing official told Reuters by telephone from the company's headquarters in Sheznhen on Friday.

Last month, China resumed issuing quotas under the QDII scheme after a 17-month halt as global markets stabilised and it seeks ways to channel its mounting foreign exchange reserves -- the world's largest at well over $2 trillion.

EFund Management Co and China Merchants Fund Management Co have since been given combined $1.5 billion investment quotas.

Beijing launched the QDII programme in 2006 to allow Chinese money to be invested abroad despite capital controls, but early investors suffered losses as a result of the global financial crisis.

The government halted the issuance of new QDII quotas following the last approval in May 2008, reflecting the worsening performance of QDII funds as global market conditions deteriorated.

However, investor confidence has picked up in recent months, as global stock markets rebound on hopes that the worst of the financial crisis and economic downturn has passed. ($=6.83 yuan)