Chinese market crash and new rules combine to make investors look further afield.

China's sharemarket rout raises questions about where the country's equity investors, who have developed quite a taste for shares, might look to put their money next.

While Chinese property investment grabs a lot of headlines in New Zealand, little attention is paid to the potential for some of that capital to start flowing into NZX-listed stocks.

Beijing is gearing up to start a pilot programme this year that will allow individuals in six cities to invest directly overseas.

The "qualified domestic individual investor programme", or QDII2, could unleash billions in Chinese savings into international stock, bond and property markets.


And China's sharemarket crash, which wiped trillions off the value of stocks, may well have convinced many Chinese investors that the volatile exchanges in Shanghai and Shenzhen aren't the best bet.

"Maybe I should invest abroad," Chinese investor Zhou Liangjun told Newsweek at the height of the sell-off last week.

The QDII2 scheme will be open only to relatively wealthy individuals with at least 1 million yuan ($245,950) in assets.

ANZ's Hong Kong-based chief economist for greater China, Li-Gang Liu, told Stock Takes that a "certain portion" of investments made through the programme could be expected to enter Australia and New Zealand's equity markets.

"Chinese investors have shown great interest in foreign property and increasingly they will look at portfolio investment options," he said.

"Equity and bond yield will be something they will be looking for."

We've already seen what can happen when Chinese investors suddenly shift their focus.

They began pouring cash into Hong Kong's sharemarket this year after the Chinese rally propelled the valuations of mainland stocks to elevated levels.


Li-Gang said he expected the uptake of QDII2 to be more orderly than the Stock Connect programme, which started last year, giving Chinese investors access to Hong Kong-listed stocks.

There are expectations that China's capital controls will be fully liberalised by 2020.

Brierley's return

Sir Ron Brierley's return to the New Zealand sharemarket has been low-key.

His ASX-listed Mercantile Investment Company carried out a compliance listing on the NZX last Monday.

Local trading in the shares has been light, although the stock closed up 13.33 per cent at 17c yesterday.

Brierley built up Guinness Peat Group (now named Coats Group) after he was forced out of Brierley Investments, the one-time sharemarket giant he founded in 1961, in the early 1990s.

He resigned from Coats' board in April.

Mercantile has been mounting takeovers for distressed firms and is in the midst of a bid for ASX-listed Ask Funding whose shares closed unchanged at A7.1c last night.

Another slice

Pie Funds chief executive Mike Taylor has a new fund. Photo / Supplied
Pie Funds chief executive Mike Taylor has a new fund. Photo / Supplied

Pie Funds is gearing up to launch the sequel to its popular Growth Fund.

The Takapuna-based boutique investment manager is seeking expressions of interest for the Growth 2 Fund.

Pie Funds is targeting an August 6 launch date for the fund, which will invest in small and medium-sized listed companies in Australia and New Zealand.

It may also invest in unlisted firms and will require a minimum investment of $25,000, according to a fact sheet released this week.

The company says it intends to "soft close" the Growth 2 Fund to direct investment once $150 million has been raised.

Investors have done well out of the firm's Growth Fund, which founder Mike Taylor started in December 2007. It has delivered annualised returns of 20.2 per cent since inception.

Dollars for ideas

Just Water International

boss Tony Falkenstein is offering big bucks to anyone who can come up with a great marketing idea for selling water filters.

Falkenstein has started a crowdsourcing campaign through Facebook and Twitter for a "short word or picture concept" to sell a $195 filter that uses an existing kitchen tap and doesn't require extra faucets or holes in the bench.

"I will pay US$15,000 for the best one," Falkenstein told Stock Takes.

He said he'd already received more than 100 entries.

Shares in NZAX-listed Just Water closed steady at 14c last night.

Entries can be sent to For more information go to