Banks return China investment quotas as clients bypass middlemen
Host of lenders hand back US$800m to the authorities; quota rental fees tumble to 20 from 200 basis points
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Hong Kong
GLOBAL banks have started to hand back investment quotas used to buy Chinese stocks and bonds because alternative channels for investment in China and the sliding yuan are making this once-lucrative business unprofitable.
While China's move to open up its capital markets and allow its currency to trade more freely has created opportunities for global banks, these developments are also threatening to kill off niches where they have acted as middlemen to give previously excluded foreign investors backdoor access to the mainland.
