How QFII Influence Chinese Stock Market Liberalization? Compare with Taiwan's Experience

Chan, Oi Yee, Iris (2008) How QFII Influence Chinese Stock Market Liberalization? Compare with Taiwan's Experience. [Dissertation (University of Nottingham only)] (Unpublished)

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QFII (Qualified Foreign Institutional Investors) announced in November, 2002 and formally implemented in 1st of December, 2002. It is the initial stock market liberalization policy adopted by Chinese authorizes after the accession of WTO.

Stock market liberalization is a decision to allow foreign investors to purchase domestic share. In this dissertation, the major improvements on Chinese QFII���¢��������s entry criteria and investment quota are recommended from the Taiwan���¢��������s QFII experience. Taiwan���¢��������s QFII is a good example for comparison on Chinese QFII scheme because Taiwan���¢��������s QFII is the most successful among other emerging counties such as India and Korea. The stock market behaviour of Taiwan���¢��������s QFII implementation is similar to China���¢��������s QFII implementation where both and China have high PE ratio and contain large proportion individual investors at the QFII implementation period. This dissertation is an even study on market reaction around the implementation of QFII. The author find there is no significant abnormal returns in the whole market within the short-term period, 3 months after implementation; negative abnormal returns followed the implementation. Also, there are no significant abnormal returns in the long-term period. These insignificant results implied that investors were taken a wait-and-see attitude and lack of confidence on stock market liberalization. Moreover, the findings is partly comply with the prediction of international asset pricing models , it suggested the scheme may not help much in reducing the cost of equity capital and risk premium of Chinese companies.

Finally the long term impacts of QFII scheme in difference aspects of Chinese securities market, such as advance investment strategy, listed companies information disclosure standards improvement, the conflict between domestic and foreign banks and the future developments of Chinese liberalization policies are declared in this dissertation as well.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 07 Jan 2009
Last Modified: 24 Oct 2016 12:14

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