UOB lists China A-Shares ETF

United Overseas Bank (UOB) Asset Management will release a China A-Shares ETF in Singapore on November 12.

The United FTSE Xinhua China A50 ETF, which will be listed on the Singapore Exchange (SGX) is the first China A-shares fund to be denominated and traded in Singapore dollars, according to UOB.

The underlying index provides exposure to the mainland Chinese equity market, by representing the performance of the 50 largest China A-shares companies based on market capitalisation.

A-shares are shares in Chinese companies denominated and traded in Chinese yuan, listed on the domestic Shanghai or Shenzhen stock exchanges. UOB says strong retail participation in the China A-shares market in recent years implies increasing secondary trading liquidity.

The banks highlights the Chinese economy is set to launch into a new growth trajectory, contrasting the low to negative growth rates potentially facing developed economies. According to the International Monetary Fund, China is expected to grow by 7.5% this year and 8.5% in 2010.

UOB says access to the A-shares market in China has typically been limited to Chinese nationals and qualified foreign institutional investors, who have been approved by the China Securities Regulatory Commission.