First listings of ETFs in Hong Kong and Shenzhen under a new ETF Cross-listing Scheme
The first listings of Exchange Traded Funds (ETFs) in Hong Kong and Shenzhen- under the Hong Kong-Mainland ETF Cross-listing Scheme, which facilitates cross-listing of ETFs between markets in Hong Kong and Mainland China- was launched this week ( October 23, 2020).
An exchange traded fund (ETF) is a basket of securities that trade on an exchange throughout the day, just like ordinary stock. ETFs can contain all types of investments including stocks, commodities, or bonds. Since the first ETF listed on HKEX in 1999, Hong Kong’s Exchange Traded Products (ETPs) market, which include ETFs and Leveraged and Inverse Products, has developed into one of the most diverse product markets in Asia. With over 130 ETFs listed on HKEX, Hong Kong-listed ETFs trade over HK$6.7 billion a day [in the first 9 months of 2020]- which is an increase of an average daily turnover of HK$4.5 billion in 2018- with assets under management standing at over HK$300 billion as at 30 September 2020.
HKEX Chief Executive Charles Li said: “The ETFs listed today, two each at HKEX and the Shenzhen Stock Exchange (SZSE) under the ETF Cross-listing Scheme, mark the exciting next chapter in cross-border ETFs. The Scheme facilitates access to new but established pools of liquidity and offers broader investment opportunities in both markets.
This development is the result of our ongoing commitment to make Hong Kong Asia’s leading ETF marketplace, and represents an important step forward in our continued work with the onshore Chinese exchanges, and our regulators, to deliver a successful ETF Connect,” he added.
The two new ETFs listed today in Hong Kong – CSOP Yinhua CSI 5G Communications Theme ETF (Stock code: 3193) and Hang Seng Harvest CSI 300 Index ETF (Stock code: 3130 / 83130), have been approved by the Securities and Futures Commission. Through the Renminbi Qualified Foreign Institutional Investor (RQFII) status, each invests 90 per cent or more of its total net asset value in an ETF approved by the China Securities Regulatory Commission and currently listed on the SZSE.