Hong Kong’s Value Partners Group has listed the word’s first shariah-compliant China equity exchange-traded fund on the Malaysian bourse, with the fund gaining as much as 30% before closing slightly higher than the initial public offer price.
The Shariah China A-Shares 100 rose to a peak of 2.60 ringgit (US$0.61) and ended the first day of trading on Bursa Malaysia on July 28 at 2.02 ringgit, 1% above the IPO price of 2 ringgit.
The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index closed up a marginal 0.05% at 1,515.39.
The new ETF, which tracks performance of the Dow Jones Islamic Market China A-Shares 100 Index, is also Value Partners’ first in Malaysia. The IPO was launched on July 12 with up to 4 billion units offered to the public.
According to Durraini Baharuddin, managing director of Value Partners Malaysia, the fund has over 11.12 million ringgit of assets under management.
“We expect the fund size of this new ETF to grow progressively,” she told reporters at the listing ceremony, which was also attended by Cheah Cheng Hye, co-founder and co-chairman of Value Partners Group, and Bursa Malaysia Chairman Abdul Wahid Omar.
Cheah expressed his gratitude to the Malaysian bourse for providing the platform to list the ETF.
“We hope Kuala Lumpur will be developed as a global centre for shariah compliant products to invest in Chinese securities,” he says.
Abdul Wahid described the listing of such a world first as a “significant milestone” for both Bursa Malaysia and Value Partners.
He says that it “creates new opportunities for investors in Malaysia to gain access and exposure in China A-shares through a transparent, well-regulated and orderly platform”.
He adds that the new fund “will contribute significantly to further growing the ETF market in Malaysia”.
Value Partners had $14.2 billion of total assets as of December 2020.