Mainland citizens may be allowed to invest in Hong Kong's stock market as early as July and "no later than August", insiders said Wednesday, referring to the much talked-about qualified domestic institutional investor's scheme or QDII.

　　In another development, foreigners may get the chance to trade A shares soon as the central government is also considering a qualified foreign institutional investor's scheme or QFII. This would allow foreigners to trade the mainland's Chinese-only A shares, said Xu Hongyuan, deputy director of the Economic Forecast Department under the State Information Centre (SIC).

　　"(It is) likely to be (launched) a little later than the QFII," he said.

　　The aim of the QDII scheme is to channel part of the mainland's US billion in personal foreign currency savingssintosthe Hong Kong market, said Xu.

　　Under the scheme, two closed-end investment funds, targeted at mainland individual investors, will be set up, he said.

　　An insider said the scheme plans to pool only around US billion from mainlanders, which is much lower than the US billion the special administrative region (SAR) had proposed.

　　The pace in implementing the idea, which has surprised many analysts, is the result of endorsement from top leaders, insiders said.

　　Analysts mostly welcomed the QDII scheme as supportive to stabilizing Hong Kong's bearish stock market, but expressed concerns over its small size and operational risks managers of the funds will face in the Hong Kong market.

　　"It will improve investor expectations and therefore help stabilize Hong Kong's stock market," said SIC analyst Wang Yuanhong.

　　"As a trial move, it's a good thing," said Yan Bin, analyst with Beijing Securities. "But its magnitude is far from enough to activate Hong Kong's stock market."

　　Total capitalization of the SAR's stock market is close to 3.4 trillion yuan (US billion), as compared to the US billion goal for the new funds.

　　Yan warned that mainland personal funds entering the Hong Kong market may only help release foreign investors that are trapped in the downtrend.

　　"They (QDII fund managers) are inexperienced in overseas markets,swheresmany things from trading rules to investment habits are different," she said.

　　Some critics have already attacked the China Securities Regulatory Commission's decision last year to open the B-share market to domestic investors as this virtually helped foreigners to get out of this market as it rose in value. But Chinese investors who rushedsintosthe market were soon locked up in months of downturn.