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China Asset Management Co. and Boston-based State Street Corp. (STT) will offer the country’s first exchange-traded fund starting next week until late December, according to a statement published Thursday.
Beijing-based China Asset Management, also known as Huaxia, announced the ETF offering a day after China published rules on the trading of such funds.
Huaxia said in its statement 18 securities firms had been lined up to underwrite the offering of the Shanghai 50 ETF. It will be offered to individual and institutional investors between Monday and Dec. 24.
No fund raising figures were announced. Major securities newspapers Thursday said each underwriter was obligated to buy at least 200 million yuan (US$24.2 million).
Exchange-traded funds track an index and are listed on a stock exchange. The listing allows for arbitrage between prices of the stock on the open market and how it is valued in the fund.
State Street helped the Hong Kong government sell stock it obtained during a 1998 intervention on that city’s stock market.
The Shanghai 50 ETF will track the Shanghai 50 Index of the biggest stocks on the Shanghai Stock Exchange.
(Shenzhen Daily November 26, 2004)
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