Markets

SSE 50 debuts on Taiwan bourse

(Xinhua)
Updated: 2010-12-09 10:10

TAIPEI - The WISE - SSE 50 China Tracker was listed on the Taiwan Stock Exchange Wednesday, which would become a popular investment instrument by helping local investors follow stock market movements in the Chinese mainland and share the benefits of the mainland's economic growth.

It was the first overseas exchange-traded fund (ETF) on the Taiwan bourse to track the performance of the 50 constituent A shares listed on the Shanghai Stock Exchange (SSE), or the SSE 50 Index.

The new ETF raised more than NT$54 million ($7.94 million) through an initial public offering, with its price jumping by 18.5 percent on the first trading day. It was not subjected to the seven percent daily upward and downward price movement limits in Taiwan, since it cross-list fungibility on the Taiwan and Hong Kong exchanges.

Taiwan Stock Exchange chairman Schive Chi said it was another "positive exploration" across the Taiwan Straits and a "good example" in the capital market after Yangzijiang, the mainland's fourth largest shipbuilder, and Digital China, the mainland's leading integrated information technology service provider, debuted on the Taiwan bourse this year. The two were the first mainland companies to list on the island.

The SSE 50 China Tracker consisted of 50 stocks "boasting large scale and high liquidity on the SSE," Schive Chi said. The fund is tracking the SSE 50 Index, one of the best-known stock benchmarks on the mainland that reflects overall conditions of the leading and most influential enterprises on its market.

He said the listing of the fund could offer investors good opportunities to take advantage of the booming stock market on the mainland, as the fund's shareholdings cover the mainland's key enterprises of financial, raw material, energy and transportation, among other sectors.

It started trading NT$10.6 higher than the offering price on Wednesday, and later hit NT$92, up 18.5 percent, which, insiders say, reflected the island investors' approval on the new fund and "their willingness to invest in the mainland."

The SSE 50 China Tracker was listed on the Hong Kong Stock Exchange in November 2009. According to the Taiwan Stock Exchange, as of Dec 3, 2010 the assets of the fund totaled NT$1.9 billion.

As the 15th ETF and the third offshore ETF to list on the Taiwan bourse, the fund has been introduced by KGI Securities Investment Trust from Hong Kong.

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A KGI manager, Li Zuren, told Xinhua News Agency that investors in Taiwan only need to open a stock trading account to trade the fund denominated in New Taiwan dollars, which is "much more convenient than in previous situation that investors had to invest in the mainland via the Hong Kong securities market."

"Taiwan's retail investors could more directly and frequently participate in investing in the mainland" and share the growth of the world's second largest economy, Li said.

He added that the listing of the new fund could help Taiwan's people learn more about the mainland through investment, which was "conducive to enhancing cross-Strait exchanges and understanding."