BOCI-Prudential Launches Exchange Traded Fund (ETF)

BOCI-Prudential Launches Exchange Traded Fund (ETF)

the W.I.S.E. - CSI 300 China TrackerTM
To capture the opportunity of a rapidly developing Mainland China Equity Market


Hong Kong – BOCI-Prudential Asset Management Limited ("BOCI-Prudential"), together with Deutsche Bank AG, today announced the launch of the Exchange Traded Fund (ETF), W.I.S.E.-CSI 300 China TrackerTM (the “Fund”, stock code: 2827) under the umbrella trust of World Index Shares ETFs. The Fund is expected to begin trading at the Stock Exchange of Hong Kong (“SEHK”) on next Tuesday, 17th July 2007.
The W.I.S.E.- CSI 300 China TrackerTM is designed to track the performance of the CSI 300 Index, which is a diversified index consisting of 300 A-share stocks which are listed on the Shenzhen Stock Exchange and/or the Shanghai Stock Exchange, and these 300 stocks represent around 60% of the total market capitalization of the two stock exchanges. It is a free-float market capitalization weighted index and is compiled and managed by the China Securities Index Co., Ltd. Since its official launch on 8 April 2005, the CSI 300 Index has recorded a spectacular return. As of June 29, 2007, it has increased by 275.1%*. In April 2006, it was selected as the benchmark index of the inaugural China Financial Futures. The W.I.S.E.-CSI 300 China TrackerTM will be the first ETF product to provide access of this benchmark to investors.
The W.I.S.E.-CSI 300 China TrackerTM will be managed by BOCI-Prudential. Deutsche Bank AG will be the initial participating dealer and A-share Access Product (AXP) Issuer.
Dr. Jun Ma, Chief Economist for Greater China and Head of China and HK Macro Strategy at Deutsche Bank said the real Mainland economy is robust and he expects GDP growth to be close to 11% this year, and see a strong corporate earnings growth over 30% for 2007.
“SOE asset injections, increased under-capacity in certain sectors and margin expansion are likely to support better listed companies’ performance than the nominal GDP growth for the coming few years,” he said, adding that the other supportive factor like strong liquidity conditions would likely underpin further upside to the A share market.
Dr. Ma said that the recent A share market corrections after the increase in stamp duty were healthy, and retail investors became somewhat more rational in assessing market risks. However, in case that the A share market resumes an “irrational exuberance” like in May, he believes that the government will have additional policy tools in hand to limit the re-emergence of overheating.
Given the long/ short and trading feasibility of ETFs, Dr. Tang Hing Sing, Investment Director – Quants of BOCI-Prudential, said that this series provides an efficient investment platform for investors to make their own investment decisions. The first sub-fund of this series, W.I.S.E.-CSI 300 China TrackerTM, is unique in the sense that it aims to track the CSI 300 Index. “As we get closer to the launch of the forthcoming China Financial Futures, the constituent stocks of the index will attract more attention. We believe that both this index and our ETF are representative of the investment opportunities offered by the rapidly growing China equity market.”
Mr. T.C. Mak, the CEO of BOCI-Prudential, said he is proud to have this cooperation. “Deutsche Securities Asia Ltd is the market maker of the Fund as well as some other ETFs in the Stock Exchange. We are confident that their professionalism helps to maintain a viable market and promote the product to the global investors. I believe that the cooperation of China Securities Index Co Ltd, Deutsche Securities Asia Ltd and BOCI-Prudential will provide a meaningful contribution to the development of the fund industry. I wish our cooperation continues to develop and strengthen in the future and more investors can benefit from our products.”