Foreign capital quotas set for major increase (2)

Since the commission approved the qualified investor program to trade stocks in the mainland market, they have become the third-largest group of institutional investors of China's A-shares, according to Tommy Ong, senior vice-president of the DBS Bank.

A-shares will be the priority for foreign investors if they want to benefit from China's economic development and reforms, Ong said.

The Shanghai Composite Index, the mainland benchmark index, rose 3 percent or 68.74 points on Monday to 2311.74 at the close.

Based on what Guo said on Monday, investment quotas may be lifted "sooner than we expected", Moody's senior analyst Ivan Chung told China Daily.

"It is likely there will be some move (in increasing the quota) within this year," said Chung, adding that the quota is likely to be gradually increased rather than increased by 10 times at once.

Chung pointed out that most investors are expecting some new policies may be introduced after March 2013.

Guo also said the mainland regulators will gradually expand the Qualified Domestic Institutional Investor (QDII) program, and launch the qualified domestic individual investor (or QDII2) on a trial basis, allowing mainland individual investors to trade Hong Kong stocks directly, he said, without offering any details.

Xu Hongcai, a senior economist with the government's top think tank China Center for International Economic Exchanges said on Monday that it is possible to launch a pilot program of the second phase of the QDII program in the first half of this year.