(Bloomberg) — BlackRock Inc., the worlds largest money manager, plans to start using the Shanghai-Hong Kong exchange link, endorsing a program that has so far been slow to lure international investors.
The firms Hong Kong-domiciled China A-Shares Fund plans to invest part of an initial $60 million via the connect after a round of successful tests, said Marc Desmidt, BlackRocks head of strategic product management for Asia Pacific. The money manager already has about $1.5 billion of quota to buy mainland shares through separate programs for qualified foreign institutions.
We have a long history of over ten years investing in Chinas onshore markets and look forward to developing our offering through the new opening, Desmidt said.
Foreign investors have left about 45 percent of their quota through the connect unused since it began in November, a period when the Shanghai Composite Index more than doubled. The gauge has since dropped more than 20 percent from its peak, bringing an end to its longest-ever bull market.
BlackRocks decision to use the link isnt related to the latest market drop, Desmidt said. The company, which received permission from a Luxembourg market regulator for 15 global funds to trade through the connect, hasnt yet used money from individual investors via the link.
The Shanghai Composite Index dropped 3.3 percent to 4,053.03 at the close, after swinging between a loss of 7.6 percent and a gain of 2.5 percent in Monday trading, recording the biggest intraday point move since 1992.
