Taiwan will let China's qualified domestic institutional investors (QDII) buy local stocks worth up to $500 million, the Financial Supervisory Commission said on Friday, falling short of market expectations.
The move came a day before a historic financial deal sealed by China and Taiwan takes effect - business ties between the two countries have warmed since China-friendly President Ma Yin-jeou took office in 2008. The cap was below market expectations and only half the $1 billion ceiling the commission was considering.
"The ceiling is not big right now. We will review whether to raise it regularly," Li Chi-hsien, director general of the Securities and Futures Bureau, told reporters.
China Asset Management, the mainland's biggest fund manager, and the fund joint venture of JPMorgan in China, which have applied to buy Taiwan stocks, will be able to invest in the stock market as soon as next week, Li said.
Each QDII will be allowed to buy as much as $80 million of Taiwan shares, while it can invest only up to 5 percent of stocks in a local financial firm, he said.
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