News Alert: HKEx (388 HK) announced an official launch for ETF connect (+ve)
What’s new
- HKEX announced the inclusion of ETFs in connectivity targets, with an official launch date of 2022 Monday, July 4.
- HKEx, SSE, SSE and CSDC have reached consensus on the overall scheme, trading arrangements and eligibility criteria for the inclusion of ETFs in the Connectivity Target.
- The ETF inclusion has been brought up by HKEx in previous earnings calls, however, the final decision had to await for the Chinese government to approve.
- After the ETF is officially included in the Connectivity Target, all Hong Kong and overseas investors, including institutional and individual investors, can trade eligible SSE-listed ETFs under the Shanghai Stock Connect and eligible SZSE-listed ETFs under the Shenzhen Stock Connect.
- The initial List of ETFs Eligible for Northbound Trading has a total of 83 ETFs in Shanghai and Shenzhen. The total average daily traded value of the 83 ETFs is RMB20.9bn for the past 6 months, equivalent to c.3% of the China market ADT.
- TRACKER FUND, HSCEI ETF, CSOP HS TECH, ISHARESHSTECH are eligible in Hong Kong for Southbound trading. The total average daily traded value of the 4 ETFs is RMB8.6bn for the past 6 months, equivalent to c.6% of the HK market ADT
- HKEx link: HKEX intends to launch an ETF to include connectivity targets on 4 July
Our view
- The ETF launch is widely considered a “gift” for 25th anniversary of Hong Kong’s return to China.
- The news is positive to HKEx’s valuation (+ve), where HKEx’s share price has surged 8.5% in the past week, expecting President Xi’s arrival
- While the implementation of the ETFs connect will take time to ramp up in HKEx earnings, the “gift” will uphold the market sentiment of HK market.
- HKEx ADT YTD stands at HK$136bn and the market has seen a better ADT in June at HK$146bn (April-May: HK$117-119bn) amid the announcement of Chinese government stimulus measures in various sectors
- With President Xi’s arrival to HK, rumors that there will be further stimulus plans/gift to HK.
- Our recommendation and TP is under review.
Please see the list of Northbound eligible below:
| No. | HKSE Stock Code | Name | 6M Average daily traded value (HKD) |
| 1 | 2800 | TRACKER FUND | 3,796,616,034 |
| 2 | 2828 | HSCEI ETF | 3,639,100,577 |
| 3 | 3033 | CSOP HS TECH | 1,058,119,267 |
| 4 | 3067 | ISHARESHSTECH | 153,587,234 |
Please see the list of Northbound eligible below:
| No. | SSE / SZSE Stock Code | Name | 6M Average daily traded value (RMB) |
| 1 | 510050 | CHINAAMC SSE 50 ETF | 2,027,686,112 |
| 2 | 510180 | HUAAN SSE 180 INDEX ETF | 77,842,873 |
| 3 | 510230 | GUOTAI SSE 180 FINANCIAL ETF | 52,669,717 |
| 4 | 510300 | HUATAI-PB CSI 300 ETF | 2,248,671,854 |
| 5 | 510310 | E FUND CSI 300 ETF | 151,734,620 |
| 6 | 510330 | CHINAAMC CSI 300 ETF | 542,343,272 |
| 7 | 510350 | ICBCCS CSI 300 INDEX ETF | 35,543,672 |
| 8 | 510360 | GF CSI 300 ETF | 11,342,477 |
| 9 | 510380 | CHINA LIFE AMP HS300 INDEX ETF | 1,172,992 |
| 10 | 510500 | CHINA SOUTHERN CSI 500 ETF | 1,567,786,682 |
| 11 | 510510 | GF CSI 500 ETF | 49,416,743 |
| 12 | 510580 | E FUND CSI 500 ETF | 29,246,958 |
| 13 | 510810 | CUAM CSI SHANGHAI SOES ETF | 5,565,047 |
| 14 | 510880 | HUATAI-PB SSE DIVIDEND ETF | 338,986,927 |
| 15 | 512000 | HWABAO WP BROKER ETF | 752,047,499 |
| 16 | 512010 | E FUND CSI 300 HEALTH CARE ETF | 396,925,856 |
| 17 | 512170 | HWABAO WP HEALTHCARE ETF | 343,632,088 |
| 18 | 512290 | GUOTAI CSI BIO-MEDICINE INDEX ETF | 109,883,561 |
| 19 | 512400 | CHINA SOUTHERN CSI SWS NF METAL ETF | 155,506,888 |
| 20 | 512480 | CPIC SEMICON ETF | 417,007,215 |
| 21 | 512500 | CHINAAMC CSI 500 ETF | 189,853,745 |
| 22 | 512580 | GF CSI ENVIRONMENTAL PROTECTION IND ETF | 69,101,155 |
| 23 | 512660 | GUOTAI CSI NATION DEFENSE IND INDEX ETF | 533,891,597 |
| 24 | 512670 | PENGHUA CSI DEFENSE INDEX ETF | 128,501,580 |
| 25 | 512680 | GF CSI NATIONAL DEFENSE INDUSTRY ETF | 35,179,524 |
| 26 | 512690 | PENGHUA CSI ALCOHOLIC DRINK INDEX ETF | 478,435,911 |
| 27 | 512700 | CHINA SOUTHERN CSI BANKS ETF | 142,485,691 |
| 28 | 512710 | FULLGOAL CSI AERO DEFENSE INDEX ETF | 138,981,946 |
| 29 | 512760 | GUOTAI CES CHINA SEMICON CHIP INDEX ETF | 326,002,941 |
| 30 | 512800 | HWABAO WP BANK ETF | 366,801,862 |
| 31 | 512880 | GUOTAI CSI ALL SHARE INDEX ETF | 1,363,958,268 |
| 32 | 512900 | CHINA SOUTHERN CSI ALL SHARE INDEX ETF | 97,318,948 |
| 33 | 512950 | CHINAAMC CSI CENTRAL-SOES’ REFORM ETF | 2,614,283 |
| 34 | 512960 | BOSERA CSI CENTRAL-SOES STRL REFORM ETF | 911,884 |
| 35 | 512980 | GF CSI MEDIA INDEX ETF | 91,897,269 |
| 36 | 515000 | HWABAO WP TECHNOLOGY ETF | 55,363,698 |
| 37 | 515030 | CHINAAMC CSI NEW ENERGY VEHICLES ETF | 434,988,741 |
| 38 | 515050 | CHINAAMC CSI 5G COMMUNICATION ETF | 132,839,141 |
| 39 | 515170 | CHINAAMC CSI FOOD&BEVERAGE SUB-IND ETF | 124,538,916 |
| 40 | 515290 | TH CSI BANKS ETF | 76,553,888 |
| 41 | 515330 | TH CSI 300 ETF | 9,345,750 |
| 42 | 515380 | TAIKANG CSI 300 INDEX ETF | 103,178,804 |
| 43 | 515600 | GF CSI CENTRAL-SOES INNOV DRIVEN ETF | 1,580,996 |
| 44 | 515650 | FULLGOAL CSI CONSUMER 50 INDEX ETF | 55,655,626 |
| 45 | 515680 | HARVEST CSI CENTRAL-SOES INNOV ETF | 2,856,740 |
| 46 | 515700 | PING AN CSI NEW ENERGY AUTOMOB IND ETF | 265,547,069 |
| 47 | 515790 | HUATAI-PB CSI PHOTOVOLTAIC INDUSTRY ETF | 724,790,216 |
| 48 | 515800 | CUAM CSI 800 ETF | 35,832,249 |
| 49 | 515880 | GUOTAI CSI ALL SHARE COMM EQP INDEX ETF | 41,555,613 |
| 50 | 515900 | BOSERA CSI CENTRAL-SOES TECH INNOV ETF | 23,550,648 |
| 51 | 516150 | HARVEST CSI RARE EARTH INDUSTRY ETF | 89,531,952 |
| 52 | 516160 | CHINA SOUTHERN CSI NEW ENERGY ETF | 158,953,513 |
| 53 | 516970 | GF CSI CONSTRUCTION ENGINEERING ETF | 294,628,897 |
| 54 | 159736 | FOOD & BEVERAGE ETF | 24,715,517 |
| 55 | 159755 | GF BATTERY ETF | 135,364,692 |
| 56 | 159790 | CARBON NEUTRALITY | 156,614,439 |
| 57 | 159801 | GF CHIPS ETF | 41,006,923 |
| 58 | 159806 | NEW ENERGY CARS | 57,321,965 |
| 59 | 159819 | AI INTELLIGENCE | 46,382,175 |
| 60 | 159820 | TH 500 ETF | 7,939,962 |
| 61 | 159825 | AGRICULTURE ETF | 146,265,502 |
| 62 | 159837 | BIOTECHNOLOGY | 71,404,690 |
| 63 | 159841 | TH IBB ETF | 99,506,515 |
| 64 | 159901 | EFUND SSE100 ETF | 80,380,984 |
| 65 | 159905 | ETFSHL | 72,988,917 |
| 66 | 159915 | CHINEXT ETF | 1,130,888,198 |
| 67 | 159919 | CSI300ETF | 475,815,909 |
| 68 | 159922 | CSI500ETF | 134,462,236 |
| 69 | 159925 | CS300ETF | 2,912,171 |
| 70 | 159928 | CSI CONS STAP ETF | 157,875,279 |
| 71 | 159938 | HEALTH CARE ETF | 31,749,033 |
| 72 | 159940 | FINANCIALS | 9,281,221 |
| 73 | 159948 | CHINEXT ETF | 24,718,026 |
| 74 | 159949 | CHINEXT 50 ETF | 1,021,330,335 |
| 75 | 159952 | CYETF | 65,053,780 |
| 76 | 159959 | CENTRAL-SOES ETF | 2,524,831 |
| 77 | 159967 | CHINEXT MG ETF | 154,827,935 |
| 78 | 159977 | TH CHINEXT ETF | 25,680,637 |
| 79 | 159992 | BRAND NAME DRUG ETF | 136,036,705 |
| 80 | 159994 | YINHUA 5G ETF | 39,060,598 |
| 81 | 159995 | CHIPS ETF | 524,957,318 |
| 82 | 159996 | HOME APPLIANCES ETF | 120,309,692 |
| 83 | 159998 | TH COMPUTER ETF | 13,552,802 |