Bank of China launches Europe’s first RMB-denominated China A share ETF on CEINEX

Nov 18th, 2015 | By | Category: Equities

Bank of China International (BOCI), in partnership with German investment bank Commerzbank, has announced the launch of Europe’s first Renminbi-denominated China A Share ETF: the BOCI Commerzbank Shanghai Stock Exchange 50 (SSE50) A Share Index UCITS ETF (BOC1 GR). The ETF has made its debut at the inauguration of the Frankfurt-headquartered China Europe International Exchange (CEINEX).

Bank of China launches Europe's first RMB-denominated China A share ETF on CEINEX

Bank of China has launched Europe’s first RMB-denominated China A share ETF on the newly inaugurated CEINEX China-Europe exchange.

Linked to the performance of the Shanghai Stock Exchange 50 A Share Index, the ETF directly invests in China A Shares via the Shanghai-Hong Kong Stock Connect using a physical replication method.

It is denominated in RMB and adopts the widely recognized UCITS structure, allowing European investors to access China’s market more conveniently.

BOCI’s joint venture BOCI-Prudential Asset Management has been delegated the role of investment management of the fund.

The launch of the ETF further opens up China’s stock market to European investors and is another step in the internationalization of the RMB.

CEINEX is a joint venture with the Shanghai Stock Exchange, the Deutsche Börse and the China Financial Futures Exchange, which hold stakes of 40%, 40% and 20% in the exchange respectively. The partners hope to build a specialist offshore RMB securities listing and trading centre in Europe, offering offshore RMB securities listing and trading services in Europe to meet investors’ investment and financing demand for RMB.

Commenting on the launch, Han Chen, Co-CEO of CEINEX, said: “On behalf of CEINEX, I would like to warmly welcome and congratulate BOCI on the listing of the Bank of China International Commerzbank Shanghai Stock Exchange 50 A Share UCITS ETF. The launch of the ETF broadens the spectrum of Europe’s RMB equity fund market, creates a conduit for investors in the region to access China’s stock market and further expand RMB investment channels. The launch of CENIEX is another major milestone in China’s capital market liberalization after the Shanghai-Hong Kong Stock Connect scheme. As the gateway between Europe and China, CEINEX will focus on ETFs, bonds and other cash products at its early stage of development. It will gradually broaden its RMB financial derivatives offerings to meet the demand of overseas investors and further promote RMB internationalization.”

Li Tong, Chief Executive Officer of BOCI, added: “We are honoured to launch Europe’s first RMB-denominated A Share ETF on the day of CEINEX’s inauguration. It boosts the opening up of China’s capital market and RMB internationalization, opening a new chapter in our overseas business development. At the early stage of CEINEX’s establishment, BOCI has worked closely with the Exchange and dedicatedly designed financial products for the platform. It showcases BOCI’s professional knowledge and capability to create investment opportunities amid the volatile global economic environment.”

Wong Chung Man, Head of Equity Sales & Research Division of BOCI, commented: “The issuance of the ETF facilitates the access of overseas investors to China’s capital market during European trading hours. The ETF has a mature market-making mechanism, offering investors liquidity and comprehensive support. In addition, the ETF fully complies with the EU Financial Regulatory Framework which helps protect the investors.”

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