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Singapore Exchange in talks with HK-listed yuan ETFs on 2nd listing
October 24, 2013--Singapore Exchange Ltd has approached fund houses who have yuan exchange-traded funds listed in Hong Kong to consider the possibility of a second listing in the city-state, a senior exchange executive said on Thursday.
Another listing would provide a broader range of offshore yuan products for investors, Singapore Exchange executive vice president Chew Sutat told Reuters on the sideline of the Asia Securities Forum.
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Source: Reuters
FMIC sees strong ETF demand
October 23, 2013--First Metro Investment Corporation (FMIC) expects strong demand for country's first ever exchange traded fund (ETF) that will be listed on December 2, which also aims to attract retail investors with its minimum subscription of P5,000.
Roberto Juanchito Dispo, FMIC president said the timing for such investment is just appropriate, particularly for retail investors, as they anticipate market correction and may therefore be a good time to buy the index that will comprise the Index ETF.
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Source: Manilla Bulletin
China to launch simulated trading in stock index options in Nov-report
October 23, 2013--China will launch simulated trading in stock index options on November 8, official media reported on Wednesday, as regulators move to enhance risk hedging options to support further financial reforms.
The China Financial Futures Exchange will base the options on the index that tracks the 300 largest companies on the Shanghai and Shenzhen stock exchanges, the official Shanghai Securities News reported, citing an exchange document issued to its members.
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Source: Reuters
Citi to Provide China Asset Management Global Custody, Trustee and Fund Administration Services for New Exchange-Traded Fund
October 23, 2013--Citi Hong Kong has been appointed by China Asset Management (Hong Kong) Limited (CAMHK) to provide global custody, trustee and fund administration services for their newly-launched CES China A80 Index Exchange-Traded Fund (ETF).
Selected as the Renminbi Qualified Foreign Institutional Investors (RQFII) custodian, Citi China is responsible for ensuring the safe custody of CAMHK's assets under management within China. This appointment further strengthens Citi's continued alliance with CAMHK since the launch of its CSI 300 Index ETF, the world's first RQFII A-Share ETF, in July 2012.
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Source: Citi
Top China Banks Triple Debt Write-Offs as Defaults Loom
October 23, 2013--China's biggest banks tripled the amount of bad loans written off in the first half, cleaning up their books ahead of what may be a fresh wave of defaults.
Industrial & Commercial Bank of China Ltd., the world’s most profitable lender, and its four largest rivals expunged in the first six months 22.1 billion yuan ($3.65 billion) of debt that couldn’t be collected, up from 7.65 billion yuan a year earlier, filings showed. That didn't pare first-half profits, which climbed to a record $76 billion, as provisions were set aside in earlier periods when the loans began souring.
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Source: Bloomberg
Introduction of CNX Nifty Futures
October 23, 2013--1. Purpose
Considering needs of investment in and hedging against India's rapidly growing capital market, Osaka Securities Exchange Co., Ltd. (OSE) will introduce futures based on CNX Nifty which is a major Indian stock index used as a benchmark in various financial instruments.
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2. Outline of Trading
(1) Trading Hours (JST):
From 9:00 a.m. to 3:15 p.m. and from 4:30 p.m.to 3:00 a.m. on the next day
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Source: Tokyo Stock Exchange
Singapore joins the RQFII party
City state given 50b yuan quota during visit by Vice-Premier Zhang Gaoli
October 23, 2013--Singapore has bolstered its credentials as an offshore yuan hub, joining Hong Kong and London as the only the third centre outside mainland China allowed to use the currency to trade in Chinese stocks and bonds.
The city state would obtain 50 billion yuan (HK$63.6 billion) worth of quota under the renminbi qualified foreign institutional investor (RQFII) scheme, the country's central bank said yesterday. The announcement came during a visit by Vice-Premier Zhang Gaoli.
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Source: South China Morning Post
Futures trade on ASX volatility index begins
October 22, 2013--The Australian Securities Exchange has started futures trading on the S&P/ASX 200 VIX Index, a volatility gauge designed to help traders hedge against stock-market drops and speculate on swings.
"S&P/ASX 200 VIX futures will allow users to isolate local equity market volatility and avoid the timing, currency and matching risk incurred when using volatility products based on offshore indices," ASX said in a statement yesterday.
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The Sydney Morning Herald
DB Synthetic Equity & Index Strategy-Asia-Pac Weekly ETF Market Review- Korea and Taiwan focused ETFs experience outflows
October 22, 2013--Data in this report is as of 18 October 2013.
Market Review
All the major markets in the Asia-Pacific region except China, ended the week in positive territory. Compared to the week before, from north to south:
Japan (Nikkei 225) +1.09%
South Korea (KOSPI2) +1.84%
China (CSI 300) -1.72%
Hong Kong (HSI) +0.52%
Singapore (FSSTI) +0.41%
Australia (S&P/ASX 200) +1.73%
New Product Launch Review
Last week, five new equity and two multi asset products were launched in the Asia-Pacific ETP market. Market Vectors Australia listed four sector ETFs (MVB AU, MVE AU, MVA AU & MVR AU) on the Australian Securities Exchange focused on Australia’s banking, emerging energy resources, property and energy sectors respectively. UBS listed one sector ETF (159933 CH) on the Shenzhen Stock Exchange tracking CSI 300 Financial and Property index. Further, KB Asset Management listed two multi asset ETFs (183700 KS) and (183710 KS) on the Korea Stock Exchange providing exposure to the mix of Korean equities and bonds.
ETP Weekly Flows- South Korea and Taiwan ETFs experience outflows
Last week, Asia-Pacific ETP market recorded outflows of -$596mn vs. -$39mn of outflows for the previous week, setting the YTD weekly flows average at +$304mn (+$12.8bn YTD in total flows). Outflows were primarily experienced by emerging markets and leveraged long strategy ETFs recording -$476mn and -$149mn of redemptions. Within emerging markets equity ETFs, products benchmarked to South Korea and Taiwan saw outflows of -$323mn and -$147mn respectively.
Winners and losers: At ETP level, newly listed UBS SDIC CSI 300 Financials Index ETF (159933 CH) and Kindex 200 ETF (105190 KS) were the largest cash flow receiver of the week collecting +$83mn and +$71mn respectively. Over the same period, biggest outflows were experienced by Samsung KODEX 200 (069500 KS), Daiwa Topix ETF (1305 JP), and Taiwan Top50 Tracker Fund (0050 TT) recording -$351mn, -$228mn and -$147mn of outflows respectively.
Turnover Review - Floor activity revolves around $10bn
Asia-Pacific ETP turnover totaled $10.1bn for the last week. South Korea took the lead in the turnover ranking with $3.7bn turnover, followed by China ($2.6bn), Japan ($2.3bn) and Hong Kong ($1bn). Among equity ETFs, Emerging country, leveraged long, Asia-Pacific developed country and short ETFs had total turnover of $4.2bn, $2.6bn, $1bn and $0.7bn respectively. Within fixed income asset class, turnover in sovereign and money market ETFs totaled $635mn and $187mn respectively.
Assets under Management Review - Assets decreased by $1.5bn
Last week, Asia-Pacific ETP AUM decreased by $1.5bn and ended the week at $164.1bn. On a year-to-date basis, Asia-Pacific ETP market is up by $28.1bn or 20.7% above last year’s closing.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy- Asia
K&L Gates Legal Insight: 2013 Recent Developments in Hong Kong Funds Market
October 22, 2013--The Hong Kong funds industry has faced significant challenges in recent years, having had to deal with the fallout from several financial scandals and a securities regulator that has become more aggressive in an effort to minimize the possibility of future scandals.
Hong Kong also faces increasing competition from Singapore and Taiwan, which have been trying to attract financial business from Hong Kong. However, in 2013, the securities regulators in the People's Republic of China (PRC) announced revisions to the RQFII pilot scheme that it had already introduced in Hong Kong two years ago, as well as an unprecedented mutual funds recognition platform between the PRC and Hong Kong fund market that will insure Hong Kong’s funds market for the immediate future and help it maintain its position at the forefront of Asian investment centres.
RQFII
The Renmimbi (RMB) Qualified Foreign Institutional Investor (RQFII) pilot scheme, announced in December 2011, was intended to be an expansion of the Qualified Foreign Institutional Investor (QFII) program, the key difference being that, whereas QFII quota-holders had to convert foreign currency into RMB in order to invest in PRC securities, RQFII quota-holders could invest directly into PRC domestic capital markets with offshore RMB. The RQFII pilot scheme also allows institutional investors outside the PRC to facilitate investments of offshore RMB deposits back into Chinese capital markets, by enabling them to establish RMB-denominated funds and/or public or private funds or other investment products outside of the PRC and utilising the RMB thereby raised to invest in PRC domestic assets.
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Source: Choo Lye Tan, K&L Insightd