KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Japan has renewed calls for China to broaden its outbound investment scheme, highlighting growing demand among mainland investors for exposure to Japanese equities.
Satoru Shibata, an adviser to Japan’s Financial Services Agency (FSA) on China matters, voiced the request during a Tokyo forum on Friday. Citing “strong enthusiasm” from Chinese investors, Shibata emphasized the need to expand the Qualified Domestic Institutional Investor (QDII) programme — a key channel that enables Chinese firms to invest in overseas assets within government-imposed limits.
🗣️ "Local demand for Japanese shares is strong. A further expansion of the quota is necessary," Shibata said, noting that the view was his own and not official policy.
Growing Appetite Meets Limited Access
Chinese interest in Japanese equities surged last year as China’s domestic stock markets faced headwinds. A buying frenzy of Japan-focused ETFs by Chinese investors triggered trading halts and allocation rebalancing among fund houses, who redirected more of their QDII quota to meet the intense demand.
Despite recent steps to loosen capital controls, access remains constrained:
Last month, China's State Administration of Foreign Exchange raised the total QDII quota by US$3 billion to US$170.9 billion — the first adjustment in over a year.
However, Bloomberg Intelligence called the increase “insufficient” to meet investor demand.
Managers of five China-based ETFs tracking Japanese equities now have up to US$220 million in combined investment limits, should demand spike again.
More Channels, But Still Not Enough
Chinese citizens are prohibited from directly using their annual US$50,000 forex allowance for buying foreign securities. This leaves only a few official paths for diversification, including:
QDII funds
Stock connect programs with Hong Kong
Meanwhile, attempts to bypass capital controls through unofficial means led to regulatory crackdowns between 2021–2023.
Japan-China Cooperation in the Works
Shibata expressed optimism about bilateral financial ties, stating:
🗣️ “There is enormous potential for growth in Japan–China financial cooperation.”
To strengthen this, the FSA is pushing to revive the Japan–China Capital Market Forum, a platform last held three years ago. The forum aims to enhance collaboration between both countries’ financial regulators and capital market players.
Key Takeaway
As Chinese investors increasingly look abroad for portfolio diversification, Japan is positioning itself as a prime destination. However, without a significant expansion in outbound investment channels like QDII, the demand may continue to outstrip supply — limiting the pace of capital flow into Japanese markets.
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