First listings of ETFs in HK, Shenzhen mark next chapter in cross-border ETFs: HKEX chief
The first batch of Exchange Traded Funds (ETFs) in Hong Kong and Shenzhen under the Hong Kong-Mainland ETF Cross-listing Scheme was listed Friday, marking the exciting next chapter in cross-border ETFs, Chief Executive of the Hong Kong Exchanges and Clearing Limited (HKEX) Charles Li said.
Li said that the ETF Cross-listing 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," Li said.
The two new ETFs listed on Friday in Hong Kong, CSOP Yinhua CSI 5G Communications Theme ETF and Hang Seng Harvest CSI 300 Index ETF, have been approved by the Securities and Futures Commission in Hong Kong. Through the Renminbi Qualified Foreign Institutional Investor (RQFII) status, each invests 90 percent or more of its total net asset value in an ETF approved by the China Securities Regulatory Commission and currently listed on the Shenzhen Stock Exchange (SZSE).
HKEX and SZSE Friday also signed a memorandum of understanding (MOU) to promote the ETF Cross-listing Scheme and celebrate the well-established financial connections of the two markets.
"Capital markets in Hong Kong and the mainland have remained robust and resilient through recent challenging times," Li said, adding that the signing of the MOU is an important step forward in building valuable financial connections within the Guangdong-Hong Kong-Macao Greater Bay Area.
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 6.7 billion Hong Kong dollars (about 864 million U.S. dollars) a day, with assets under management standing at over 300 billion Hong Kong dollars as at 30 Sept. 2020. (1 U.S. dollar = 7.75 HK dollars) Enditem