China injects liquidity into market

The State Administration of Foreign Exchange on Monday approved nearly 15 billion yuan in investment quota for overseas investors.

Under the quota, 9.2 billion yuan or 1.5 billion US dollars went to the RMB Qualified Foreign Institutional Investors, or RQFII, and 900 million U.S. dollars were given to Qualified Foreign Institutional Investors, QFII.

Analysts say the move aims at injecting more liquidity into the country's stock markets, but that the quantity is too low to have a major impact. Equity broker CLSA Asia-Pacific Markets says that investors are more interested in China's bond market instead of the stocks at the moment, and question how much of the approved quota will actually flow into equities.