Shanghai Stock Exchange Central SOEs ETF launched

Shanghai Stock Exchange Central SOEs ETF launched

29/10/09

October 27 witnessed the 1st ETF, namely, the SSE Central State-owned Enterprises ETF Index Fund, on the market in 3 years after General Manager Guo Tehua of ICBC Credit Suisse Asset Management Co., Ltd. (ICBCCS) and President Chen Geng of Guotai Junan Securities Co., Ltd. struck the gong to announce the opening of trade on the Shanghai Stock Exchange (SSE) that day. The new product provides the investors who keep their eyes on the sector of the state-owned enterprises (SOEs) with another high-efficient investment instrument. All this will further activate the SOEs sector and ETF trading and attract more investors by offering more opportunities for investment in the SOEs.

Relevant officials from the SSE and China Securities Index Co., Ltd. as well as nearly a hundred of guests from several securities dealers and assets management institutions extended their congratulations. ICBCCS General Manager Guo Tehua and SSE Vice President Liu Xiaodong signed the "Agreement on Listing".

It is learnt that the SSE Central SOEs ETF, the 1st listed ETF in 3 years and the first of its kind ever in China, tracks the SSE Central SOEs Index, which pools 50 stocks of listed companies of SOEs with large market capitalization and sufficient liquidity on the SSE. So, it is also called the "super SOEs blue chip". Benefited from the RMB4 trillion economic stimulus plan of the state and the increasingly speeding process for reorganization of SOEs, the value of investment in SOEs has long been cherished by the investors. Statistics show that in 2009, such indicators as the P/E and P/B ratios of the SSE Central SOEs Index are the lowest among the main indices. By October 21, 2009, the average P/E ratio of the SSE Central SOEs 50 Index had been 22.16 times, lower than that of the SSE Composite Index of 26.63 times, that of the SSE 50 Index of 23.24 times and that of the CSI 300 Index of 25.75 times. Over RMB3 billion were achieved through online cash subscription in a single day, raising 4.5 billion units from a great many excited subscribers during the period of issuing SSE Central SOEs ETF.

The securities code for listing and trading of SSE Central SOEs ETF is "510060", with the code for subscription and redemption of "510061". Investors can trade the fund on the secondary market in the same way of purchase and sale of stocks. Besides, they can also make subscription and redemption for the fund through the package portfolio of constituent stocks of the SSE Central SOEs Index on the primary market, with a minimum requirement of 1 million fund units for each lot.