ETF backed by mainland shares starts HK trading
Source: Bloomberg News |
00:00 UTC+8 July 18, 2012
|
Print Edition
Print Edition
THE first exchange-traded fund backed by stocks listed on the Chinese mainland began trading in Hong Kong yesterday. It is the first equity ETF listed in Hong Kong traded in the yuan.
The China AMC CSI 300 Index ETF fund traded at 24.20 yuan, 2.8 percent below its opening price, at the close, with about 4.28 million units changing hands. The security, listed by China Asset Management Ltd, tracks the China AMC CSI 300 Index via so-called A-shares purchased with yuan raised outside Chinese mainland. The shares are acquired through the RMB Qualified Foreign Institutional Investor quota granted by mainland authorities.
The fund is the first to give investors who don't have special permission to invest in the Chinese companies access to returns that are determined strictly by gains and losses in mainland shares. The 24 other A-share ETFs listed on the exchange are trading in Hong Kong dollars and use derivatives to replicate the indexes, according to a July 16 statement from Hong Kong Exchanges & Clearing Ltd.
"It's another tool for the recycling of the yuan," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities, the brokerage arm of listed First Shanghai Investments Ltd.
Three more physically backed A-share ETFs will be approved by the SFC, the Ming Pao Daily reported on Monday, citing Alexa Lam, deputy chief executive officer of the SFC. E Fund Management Co, CSOP Asset Management Ltd and Harvest Global Investments will create yuan-denominated funds with a 5 billion yuan (US$784 million) quota each, the paper reported.
The new funds are part of a push by China to open its capital markets and by Hong Kong to cement its position as the bridge to the mainland. Hong Kong began listing yuan-denominated IPOs in 2011 and this year cut its lunch break to more closely align with the mainland's trading hours.
The China AMC CSI 300 Index ETF fund traded at 24.20 yuan, 2.8 percent below its opening price, at the close, with about 4.28 million units changing hands. The security, listed by China Asset Management Ltd, tracks the China AMC CSI 300 Index via so-called A-shares purchased with yuan raised outside Chinese mainland. The shares are acquired through the RMB Qualified Foreign Institutional Investor quota granted by mainland authorities.
The fund is the first to give investors who don't have special permission to invest in the Chinese companies access to returns that are determined strictly by gains and losses in mainland shares. The 24 other A-share ETFs listed on the exchange are trading in Hong Kong dollars and use derivatives to replicate the indexes, according to a July 16 statement from Hong Kong Exchanges & Clearing Ltd.
"It's another tool for the recycling of the yuan," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities, the brokerage arm of listed First Shanghai Investments Ltd.
Three more physically backed A-share ETFs will be approved by the SFC, the Ming Pao Daily reported on Monday, citing Alexa Lam, deputy chief executive officer of the SFC. E Fund Management Co, CSOP Asset Management Ltd and Harvest Global Investments will create yuan-denominated funds with a 5 billion yuan (US$784 million) quota each, the paper reported.
The new funds are part of a push by China to open its capital markets and by Hong Kong to cement its position as the bridge to the mainland. Hong Kong began listing yuan-denominated IPOs in 2011 and this year cut its lunch break to more closely align with the mainland's trading hours.
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