Bosera launches China state-owned enterprise ETF in Hong Kong

The Hong Kong funds business of China’s Bosera Asset Management has debuted an exchange traded fund that tracks an index of major listed Chinese companies owned by the central government, the first of its kind on the Hong Kong stock exchange.

The Bosera China Reform Hong Kong Central-SOEs High Dividend Yield Index ETF, managed by Bosera Asset Management International, a subsidiary of Bosera AM and China Merchants Fund Management, debuted on July 10.

The ETF tracks CSI China Reform Hong Kong Connect Central-SOEs High Dividend Yield Index, a basket of centrally owned state-owned enterprises with stable dividends and high-dividend yields that are listed in Hong Kong and eligible for trading via the Hong Kong-mainland stock connect scheme.

These include the listed arms of Chinese state-owned oil companies China National Petroleum Corporation, Sinopec and China National Offshore Oil Corporation.

This article was previously published by Ignites Asia, a title owned by the FT Group.

The rollout marked “a new milestone for Hong Kong to connect central state-owned enterprises with international capital and promote linkage between domestic and international markets”, Christopher Hui, secretary for Financial Services and the Treasury of Hong Kong, said in a speech delivered via video link at the listing ceremony.

In mainland China, three ETFs, from China Southern Asset Management, GF Fund Management and Invesco Great Wall Fund Management, which track the same index, also debuted on July 10.

The three ETFs each have raised more than Rmb1.1bn (US$151mn) and they all name state-owned China Reform Holdings, one of the country’s “national team” of state investors, as a crucial investor.

The move suggests China has stepped up efforts to support stock prices of Hong Kong-listed state-owned companies.

Strategies based on stocks with high-dividend yields have been popular since last year, as Chinese investors have become more risk-averse and keen on stable returns amid a broader stock market weakness.

But experts have pointed to intensified competition among similar products as managers have rushed to launch funds in this category, according to local media reports.

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