| HONG KONG
HONG KONG May 19 Chinese asset management firm
E Fund Management (Hong Kong) said it has tied up with
London-based ETF Securities to launch an exchange traded fund
(ETF) to list on three European exchanges.
The ETF allows European investors to access China's market
while being another incremental step to expanding the yuan's
Tracking the MSCI China A Index and with a quota of 2
billion yuan ($320.9 million), the ETF will be listed on the
London Stock Exchange, Deutsche Boerse and NYSE Euronext
Amsterdam on Monday. It is the first such fund to list in three
European stock exchanges simultaneously under the Renminbi
Qualified Foreign Institutional Investor (RQFII) scheme.
The RQFII programme, launched in 2011, allows financial
institutions to use offshore yuan to invest in the Chinese
mainland's securities markets, including in stocks, bonds and
money market instruments.
"Last month when we did roadshows in Europe, we found that
many investors there were looking for opportunities in China,"
Tseng Ko, managing director at E Fund Management (Hong Kong),
told Reuters in an interview.
"European investors held a positive attitude on China's
market reform and opening up, though they also had concerns on
issues like credit default and the export slowdown," Tseng said,
adding the company planned to list this ETF in more countries.
China's economic activity showed across-the-board weakness
in April, with data from output to investment and consumption
all missing market expectations, sparking new calls for Beijing
to ease policies to shore up growth.
E Fund is not alone in expanding its yuan business roadmap.
China's Harvest Global Investments partnered with Deutsche Asset
& Wealth Management in December and listed the first yuan ETF in
the United States.
China's CSOP Asset Management also cooperated with
London-based Source to launch RQFII ETFs in London and the
United States in January.
China is stepping up efforts to reform its domestic capital
markets and to promote its currency to global investors, in a
bid to raise the status of the yuan in trade as the world's
second-largest economy opens up its markets.
In addition to the 270 billion yuan RQFII quota that was
granted to Hong Kong, Beijing also granted an 80 billion yuan
quota to France in March, following the 80 billion yuan quota
given to the UK and 50 billion yuan to Singapore.
As of the end of April, a 215.6 billion yuan quota had been
approved in Hong Kong, according to statistics from the State
Administration of Foreign Exchange (SAFE).
Tseng said the MSCI China A Index will be appealing to
European investors as it provides broader company coverage and
more diversified sector coverage than other A-share indices
which have a high concentration in a few sectors and stocks.
"Investors in the U.S. and Europe like the MSCI China index
because when they do asset allocation in the region, they do not
want to concentrate too much on a specific sector or stock,"
($1 = 6.2334 yuan)
(Editing by Jacqueline Wong)