New China ETF listed on Bursa Malaysia


The TradePlus S&P New China Tracker has become the first exchange-traded fund (ETF) to be listed on Bursa Malaysia in dual currencies.

Affin Hwang Asset Management Bhd (Affin Hwang AM) noted the fund was launched at an initial issue price of HK$10 (RM5.24) per unit.

Its stock short name is “CHINA- ETF-MYR” for the ringgit quoted units, and “CHINAETF-USD” for the US dollar quoted units.

Investors can buy and sell units throughout the trading day with a minimum board lot size of 100 units.

“The fund is an equity ETF that provides investors exposure to China’s new economy and to participate in positive growth trends and consumption patterns within its changing economic structure, as it transitions from an investment-driven to a consumption- and services-led economy,” Affin Hwang AM noted in a release yesterday.

The ETF is benchmarked against the S&P New China Sectors Ex A-Shares Index.

The ETF will employ a full replication strategy to closely track the performance of the index and provide investors the opportunity to gain broad exposure to Chinese-listed companies in fast-growing consumption- and service-oriented industries.

Affin Hwang AM added that the fund will invest a minimum 70% of the fund’s net asset value (NAV) in authorised securities, with an option to invest a maximum 20% of the fund’s NAV in derivatives and/or collective investment schemes, in order to meet its investment objective.

The remaining balance shall be invested in money market instruments and/or deposits for liquidity.

Affin Hwang AM MD Teng Chee Wai (picture) said following the listing of its first ETF (TradePlus Shariah Gold Tracker) on Bursa Malaysia in 2017, this ETF will enhance its overall product suite and bolster its position in the passive investment space as a full-fledged asset management player.

On the outlook for China, Teng said the company has seen some softness in Chinese data that shows its manufacturing sector experiencing some slowdown as a result of the trade

“Recent stimulus measures announced by Beijing to prop up growth and cushion the impact from its ongoing trade spat with the US has provided some reprieve for markets and inject liquidity.

“However, with a larger pain threshold and a more resilient economy today, we don’t see China reverting back to more aggressive stimulus measures to drive growth like its credit-fuelled binge in the past,” he said.

Teng added that the company foresees positive structural trends that will bode well for China, as the country presses on with its economic restructuring and deleveraging over the long term.

“Its services and consumption sector now constitute more than 60% of the contribution to GDP growth and is expected to increase exponentially with rising income levels and rapid urbanisation in the country.

“As China continues to harness these strengths, we see opportunities emerging from the new China and the various sectors riding on these positive consumption trends,” he said.