Building China-Europe investment conduit to drive RMB internationalization
FRANKFURT, Germany, Nov. 18, 2015 /PRNewswire/ -- BOC International Holdings Limited ("BOCI"), Bank of China's investment banking flagship, today announced the launch of Europe's first RMB-denominated A Share Exchange-traded Fund ("ETF") on the inauguration of the China Europe International Exchange ("CEINEX", "Exchange"). The launch of the ETF is another major move to broaden the spectrum of Europe's RMB equity fund market and create a conduit for European investors to access China's stock market, further expand RMB investment channels as well as boost the opening-up of China's capital market and the internationalization of the RMB.
The ETF is sponsored by BOCI and named "Bank of China International (BOCI) Commerzbank Shanghai Stock Exchange 50 (SSE50) A Share Index UCITS ETF"; ISIN / WKN: LU1306625283 / CDF1BC; Bloomberg code: BOC1 GR Equity). BOCI's joint venture BOCI-Prudential Asset Management Limited has been delegated the role of investment management of the fund. Mainly tracking the performance of SSE50, the ETF directly invests in A Shares via the Shanghai-Hong Kong Stock Connect using the physical replication method. It is denominated in RMB and adopts the widely recognized Undertakings for Collective Investment in Transferable Securities ("UCIT") structure, allowing European investors to access China's market more conveniently. The ETF starts trading on CEINEX today, which also marks the Exchange's inauguration.
Headquartered in Frankfurt, Germany, CEINEX is a joint venture with the Shanghai Stock Exchange, the Deutsche Börse AG and the China Financial Futures Exchange, which hold stakes of 40%, 40% and 20% in the Exchange respectively, and have received support and recognition from the governments and regulators of China and Germany. CEINEX is poised to build an offshore RMB securities listing and trading center in Europe, offering offshore RMB securities listing and trading services in Europe to meet investors' investment and financing demand for RMB.
Han Chen, Co-CEO of CEINEX, stated, "On behalf of CEINEX, I would like to warmly welcome and congratulate BOCI on the listing of the 'Bank of China International (BOCI) Commerzbank Shanghai Stock Exchange 50 A Share UCITS ETF'. The launch of the ETF broadens the spectrum of Europe's RMB equity fund market, creates a conduit for investors in the region to access China's stock market and further expand RMB investment channels. The launch of CENIEX is another major milestone in China's capital market liberalization after the Shanghai-Hong Kong Stock Connect scheme. As the gateway between Europe and China, CEINEX will focus on ETFs, bonds and other cash products at its early stage of development. It will gradually broaden its RMB financial derivatives offerings to meet the demand of overseas investors and further promote RMB internationalization."
Li Tong, Chief Executive Officer of BOCI, stated, "We are honored to launch Europe's first RMB-denominated A Share ETF on the day of CEINEX's inauguration. It boosts the opening up of China's capital market and RMB internationalization, opening a new chapter in our overseas business development. At the early stage of CEINEX's establishment, BOCI has worked closely with the Exchange and dedicatedly designed financial products for the platform. It showcases BOCI's professional knowledge and capability to create investment opportunities amid the volatile global economic environment."
Wong Chung Man, Head of Equity Sales & Research Division of BOCI, added, "The issuance of the ETF facilitates the access of overseas investors to China's capital market during European trading hours. The ETF has a mature market-making mechanism, offering investors liquidity and comprehensive support. In addition, the ETF fully complies with the EU Financial Regulatory Framework which helps protect the investors."
Bank of China has been reinforcing its global service capabilities and stepping up its overseas business development. It has enhanced its strategic deployment worldwide and further bolstered the Group's global competitiveness to develop a financial hub aligned with China's "One Belt and One Road" initiative. BOC will continue to fully participate in its global financial market business and to further solidify its leading position as the major channel of RMB internationalization, sharpening its competitive edges across the world.
As Bank of China's investment banking flagship, BOCI has been continuing promoting the innovation of offshore RMB products and services. It is among the first batch of the Hong Kong brokerages which provide trading services under the Shanghai-Hong Kong Stock Connect scheme. Besides, BOCI completed the first RMB collateral trade on the London Metal Exchange (LME) in July, making it the world's first financial institution to complete a RMB collateral trade. In addition, BOCI actively assists domestic companies in issuing offshore RMB bonds. In April 2015, BOCI was the joint underwriter and bookrunner for the issuance of Shenzhen Qianhai Financial Holding Limited's RMB1 billion 2.5-year offshore RMB bond, making it the largest offshore RMB bond issuance by a Chinese issuer at that time.
For details, please visit http://www.bocigroup.com/pub/sc/.
SOURCE BOC International