The mad dash among Hong Kong subsidiaries of China’s fund management companies and securities firms to be the first out of the starting gates with their renminbi qualified foreign institutional investor (RQFII) funds has produced only a few winners.
Many are scratching their heads, wondering how they could have overestimated the demand for RQFII products. They assumed these funds would be a sure thing in Hong Kong. After all, the Hong Kong market has been abuzz since 2010 about the opportunities created by the internationalisation of the renminbi.
Deposits in the currency have risen by nearly 1,000 per cent since January 2009, and the belief was renminbi holders were merely waiting to dive into an investment product that could give them access to China’s securities markets and generate more than the 50 basis points they would be paid on their deposit accounts.