The investment bank arm of Bank of China has launched an exchange-traded fund (ETF) investing in mainland-listed Chinese equities on a new exchange created by the Shanghai Stock Exchange andDeutsche Börse.
Headquartered in Frankfurt, the China Europe International Exchange (Ceinex), which is 40%-owned by the Shanghai exchange and 40%-owned by Deutsche Börse, is designed to be a European listing and trading centre for offshore-renminbi securities. China Financial Futures Exchange owns 20% of the venture.
Han Chen, co-chief executive of Ceinex, says the project will be a gateway between Europe and China. It will focus on ETFs, bonds and other cash products to begin with, including renminbi-denominated derivatives later.
"The launch of Ceinex is another major milestone in China's capital market liberalisation after the Shanghai-Hong Kong Stock Connect scheme," says Chen, referring to the scheme, launched in 2014, that provides access to China's mainland stock market by linking the stock exchanges of Hong Kong and Shanghai.
The newly launched renminbi-denominated ETF, which is structured as a Ucits fund, was listed on the first trading day of Ceinex. It tracks an index of the top 50 mainland-listed equities, known as A-shares, which it buys via the Shanghai-Hong Kong Stock Connect.
The investment manager of the ETF is a joint venture between Bank of China International and Prudential Asset Management.
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