Cross-listed ETFs likely to follow Polaris FF lead
Updated: 2009-07-24 07:19
By George Ng(HK Edition)
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HONG KONG: The local share market could receive a big boost in the foreseeable future as trucks of fresh money from Taiwan investors flow in when more than a dozen locally-listed exchange-traded funds (ETFs) get cross-listed in Taiwan.
Currently, there are 15 locally-listed ETFs that qualify for a cross-listing in Taiwan, said Alexa Lam, executive director and deputy chief executive officer of the Securities and Futures Commission.
Cross listing refers to a listing of a security in one or more foreign stock exchange in addition to a listing in its domestic exchange.
"It is hard to predict how many of these ETFs will get cross-listed in Taiwan this year," Lam told reporters yesterday.
However, she believes some of these ETFs will likely follow the lead of the W.I.S.E. Poloaris CSI 300 Securities Investment Trust Fund (the W.I.S.E. Poloaris CSI 300).
Attending a ceremony held by Taiwan-based Polaris International Securities Investment Trust Co Ltd for its planned launch of the W.I.S.E. Polaris CSI 300, Lam said ETFs will play an important role as financial cooperation among the three markets pushes on. The three markets refer to the mainland, Taiwan and Hong Kong.
The W.I.S.E. Poloaris CSI 300 fund will be listed on the Taipei Stock Exchange via a feeder-fund structure.
As a feeder fund, it will raise money through an initial public offering (IPO) and then use the cash raised in the IPO to buy units of the W.I.S.E. - CSI 300, which is a Hong Kong-listed ETF and which traces the performance of the 300 biggest firms listed in the Shanghai bourse.
With the launch of the W.I.S.E. Poloaris CSI 300, the W.I.S.E. - CSI 300 will become the first Hong Kong-listed ETF approved by the Taiwan Financial Supervisory Commission for a cross-listing in Taiwan.
Julian Liu, president and CEO of Polaris International Securities Investment Trust Co Ltd, declined to indicate how much cash the feeder fund will raise from an IPO, which is scheduled to open on July 29.
However, he noted that such a fund could raise up to $3 million cash based on current regulations in the island.
(HK Edition 07/24/2009 page3)