Hong Kong ETF market’s trading up 2.7% in April, says HKEx

15 May 2014   Category: News, Asia, Global, Hong Kong   By Hui Ching-hoo

The average daily turnover of Hong Kong’s ETF market increased 2.7% month-on-month in April to HK$282 million (US$36.15 million), while market capitalisation edged up 0.5% to HK$2.72 trillion, according to data from the Hong Kong Stock Exchange (HKEx). 

Equity-linked ETFs on HKEx suffered a decline of 3.4% in capital flows to HK$113.8 million, while synthetic A-share ETFs and RQFII A-share ETFs rose 3.2% to HK$68.1 million and 6.6% to HK$44.4 million, respectively.

Statistics showed that the X iShares A50 ETF was the most actively traded ETF in April with total monthly turnover of HK$25.09 billion, followed by the CSOP A50 ETF with a total trading volume of HK$11.58 billion.

The db X-trackers MSCI Indonesia Index UCITS ETF was the best performing ETF, delivering a year-to-date return of 21.88%, whereas the dbx-trackers MSCI Russia Capped Index UCITS ETF was ranked the worst performer, suffering a loss of 20.75% year-to-date.

Despite the Hong Kong ETF market’s sluggish turnover this year, Morningstar ETF strategist Jackie Choy said in a report that the Hong Kong-Shanghai Stock Connect pilot programme unveiled on April 10 will give a boost to the market.

“First, this pilot programme represents a new channel for foreign investors to gain access to the Mainland A-Share market. Although this will diminish the appeal of China A-Share ETFs as an access product, the existing ETFs will continue to be a useful tool for achieving broad A-share exposure. Secondly, this programme will offer an additional channel to arbitrage the price differentials that exist between these ETFs and the constituents of their benchmark indices. Hence, these ETFs’ market prices will likely trade closer to their NAV going forward,” Mr. Choy said.