Asia ETF Roundup (Industry) – July 2022

First month transactions on China-HK ETF Connect: Northbound RMB 0.4 billion, Southbound HKD 4.3 billion; Alibaba added to HFCAA list.

Jackie Choy, CFA 04 August, 2022 | 8:00
Facebook Twitter LinkedIn

For economic and market news relating to Asian ETFs, please refer to our “Asia ETF Roundup (Market) – July 2022”.

ETF Industry News

China-Hong Kong ETF Connect July Transaction Value: Northbound at RMB 0.4 Billion and Southbound at HKD 4.3 Billion

On July 4, China-Hong Kong ETF Connect was officially launched, with 83 Shanghai/Shenzhen Stock Exchange-listed ETFs in the Northbound and 4 Hong Kong Exchange-listed ETFs in the Southbound. In July, the first month the ETF Connect was in operation, the total Northbound transaction value was Rmb 0.4 billion. This would represent 0.03% of June’s total ETF turnover (as statistics for July are yet to be available) on the Shanghai and Shenzhen Stock Exchanges. Meanwhile, the total Southbound transaction value under ETF Connect was HKD 4.3 billion. This would represent 1.47% of June’s total ETF and L&I Products turnover (as the statistics for July are yet to be available) on the Hong Kong Exchange.

Hang Seng Index ETF To Delist from HKEx in September

On 13 July 2022, the unitholders of Hang Seng Index ETF (02833/82833) approved the delisting of the fund from the Hong Kong Exchange. The ETF’s last trading day on the HKEx will be 2 September 2022 and it will be delisted on 13 September. As previously announced, unitholders can take one of two courses of action from 14 July to 7 Sept 2022: (1) the unlisted fund route or (2) the conversion route to the Tracker Fund of Hong Kong (02800).

Another 6 Companies Identified Under Holding Foreign Companies Accountable Act (“HFCAA”) – Alibaba Added to the List

During the month of July, the U.S. Securities and Exchange Commission identified another 6 companies under the Holding Foreign Companies Accountable Act (“HFCAA”). This puts the total number of companies on the provisional list and conclusive list of issuers identified under the HFCAA at 159 as of the end of July 2022. Alibaba Group (BABA) was among the companies being added to the list during the month. According to the HFCAA and the companies’ announcements, a company’s ADR could be delisted from a U.S. stock exchange if the company is identified on the list for three consecutive years.

Chinese Equity ETF Watch – Net outflows from Chinese Equity ETFs in the U.S.

  • Hong Kong-domiciled ETFs in the China Equity Category saw net inflows estimated at USD 0.15 billion in July, mainly driven by an estimated inflow to the Hang Seng China Enterprises Index ETF (02828/82828).
  • Hong Kong-domiciled ETFs in the China Equity - A-Shares Category saw estimated net outflows of USD 0.10 billion in July, mainly driven by the net outflows from the ChinaAMC CSI 300 ETF (83188/03188) and the ChinaAMC MSCI China A 50 Connect ETF (82839/02839).
  • For the first seven months of 2022, Hong Kong-domiciled ETFs in the China Equity Category and the China Equity – A-Shares Category saw estimated net inflows of USD 1.1 billion and USD 0.2 billion, respectively.
  • In the U.S., the iShares China Large-Cap ETF (FXI) and the iShares MSCI China ETF (MCHI) netted an estimated USD 0.3 billion each. On the other hand, the KraneShares CSI China Internet ETF (KWEB) and the Xtrackers Harvest CSI 300 China A ETF (ASHR) saw estimated net outflows of USD 0.3 billion and USD 0.5 billion, respectively.

 image

New Launches and Listings

China: 20 ETF New Listings

  • Chinese ETF providers listed 20 new ETFs on the Shanghai Stock Exchange and Shenzhen Stock Exchange in July. These included 19 thematic/sector ETFs, and an ETF tracking the CNI 2000 Index.
  • Included in these newly listed ETFs, 8 of these track the CSI SEEE Carbon Neutral Index. According to the index methodology, the CSI SEEE Carbon Neutral Index seeks to measure the performance of securities with great potential to carbon neutrality by selecting 100 Chinese A-Shares companies in the low-carbon field with large market capitalization and companies with high carbon emission reduction potential.
  • These listings and delisting put the total number of ETFs listed in China at 714 (264 ETFs on the SZSE, 450 ETFs on the SSE).

Hong Kong: 4 ETF New Listings

  • Hong Kong ETF providers listed an actively managed ETF on metaverse, a thematic ETF on emerging markets’ internet and ecommerce activities and two high dividend yield ETFs.
  • These listings put the total number of ETFs listed in Hong Kong at 252 (166 ETFs and 86 multiple counters, including 29 leveraged/inverse products).

South Korea: 6 ETF New Listings

  • Korean ETF providers listed 3 actively managed ETFs, a thematic ETF, a bond ETF and an ETF tracking an equity/bond balanced index.
  • An ETF tracking the KTB index was delisted during the month.
  • These listings put the total number of ETFs listed in South Korea at 595.

Taiwan: 2 New ETFs Listing

  • ETF providers in Taiwan launched 2 thematic ETFs on digital payment services and aerospace & satellite, respectively, on the Taiwan Stock Exchange.
  • A bond ETF was delisted during the month.
  • This listing puts the total number of ETFs listed in Taiwan at 227.

ETFs Launched in July 2022 in the Asia ex-Japan Region

image

Facebook Twitter LinkedIn

About Author

Jackie Choy, CFA  is the Director of ETF Research for Morningstar Investment Management Asia

© Copyright 2022 Morningstar Asia Ltd. All rights reserved.

Terms of Use        Privacy Policy