Felicia Tan Published on Tue, Jul 13, 2021
Lion Global Investors and OCBC Securities will list Lion-OCBC Securities China Leaders ETF on the SGX-ST on Aug 2.
The Lion-OCBC Securities China Leaders ETF will track the Hang Seng Stock Connect China 80 Index. The index comprises the top 80 largest Stock Connect Chinese companies listed in Shanghai, Shenzhen and Hong Kong by market capitalisation.
China’s stock market – from both the Shanghai and Shenzhen exchanges – is the second largest in the world with a market capitalisation of US$12.2 trillion ($16.5 trillion) as at December 2020.
This is Singapore’s first China-focused ETF that will pay out annual dividends to investors.
It is the second ETF listed by both companies. The first, the Lion-OCBC Securities Hang Seng Tech ETF was launched in December 2020.
The new ETF will also enable investors to tap into the growth potential of the Chinese economy through the index.
According to OCBC Securities, the new listing comes amid growing interest among investors in the Chinese market. Year-to-date (y-t-d), the brokerage saw 75.4% higher trading in terms of volume of China equities in 2020 compared to that of 2019.
The new ETF is classified as an excluded investment product (EIP).
China was the only major economy to see positive growth in the world in 2020 amid the Covid-19 pandemic.
The country’s economy is expected to grow by 8.4% in 2021 and 5.6% in 2022, according to estimates released by the International Monetary Fund (IMF).
“In today’s world, we cannot deny the decisive role China plays in the global economy and in re-shaping the business landscape. The way China influences the global economy is multi-faceted and China’s rise provides a good opportunity for customers to ride this wave of growth,” says Wilson He, managing director of OCBC Securities.
“Given the success of our first ETF launch last year, it’s a clear indication that customers are looking for more ways to expand their investment portfolio in a more calibrated manner. We are confident that Lion-OCBC Securities China Leaders ETF will be an attractive proposition to those who are looking to diversify their portfolio to include China stocks,” He adds.
“The merits of investing in China are beyond doubts, made more so by geopolitical events of the last few years. As a result, investors now have a much better understanding of what leading Chinese companies can offer owing to extensive coverage by the media,” says Gerard Lee, CEO of Lion Global Investors.
“Typically, most investors express their bets on China via commingled funds, ETFs listed in Hong Kong or direct stock purchase. Our last ETF listed in December 2020, Lion-OCBC Securities Hang Seng TECH ETF, demonstrated the keen demand for a Singapore-listed ETF even when such products are available elsewhere. With this positive experience, we are confident that the forthcoming Lion-OCBC Securities China Leaders ETF will be warmly received.”
The new ETF’s initial offering period starts on July 12 and ends on July 28 with an issue price of $2 per unit. It will be available in both Singapore dollar (SGD) and renminbi (RMB) denominations.
During the period, investors can subscribe to the ETF through OCBC Securities, iFAST Financial, Phillip Securities, Tiger Brokers Singapore, UOB Kay Hian and CGS-CIMB Securities.