Tags: investing | chinese | yuan

Opportunities Grow to Invest Via Chinese Currency

By Dan Weil   |   Wednesday, 09 Sep 2009 01:01 PM

With China announcing its intention to shy away from the dollar and internationalize the renminbi, it stands to reason that more vehicles will arise to invest in China’s currency.

So it should be no surprise that Bank of China, the country’s third-largest lender by assets, will offer a range of Swiss-based funds denominated in renminbi.

The funds will be aimed at foreign investors who want to invest in Chinese markets and wealthy Chinese investors who want to invest in foreign markets.

For the Chinese investors, the funds allow them to avoid currency risk on those foreign investments.

The funds will be run by a subsidiary of Bank of China (Suisse), a Swiss private bank that is the first Chinese asset manager in Europe.

“It is the first time a Swiss registered fund is giving investors access to a renminbi dominated share class,” Daniel Penseyres, chief executive of the subsidiary, BOC (Suisse) Fund Management, told the Financial Times.

“We are seeing increasing demand not only from China’s domestic investors but also from international investors, including the Middle East, who want to invest in Chinese equities to tap into its economic growth.”

One sector Chinese investors are interested in is real estate.

China's sovereign-wealth fund China Investment Corp. is looking at U.S. real estate, including distressed mortgage securities offered through the Treasury's Public-Private Investment Program (PPIP).

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