ASEAN KEY DESTINATIONS
Thai fund opens for Chinese stocks
The W.I.S.E. KTAM CSI 300 China Tracker is a feeder fund investing at least 80 percent of assets in the W.I.S.E. China Tracker, managed by BOCI Prudential Asset Management, a subsidiary of the Bank of China.
The fund is an ETF listed on the Hong Kong Stock Exchange with a focus to invest in A-share derivative products to generate a return mirroring the CSI 300 index.
The CSI 300 index comprises the top 300 stocks traded on the Shanghai and Shenzhen stock exchanges. A-shares refer to listed stocks traded on the two mainland Chinese exchanges and denominated in renminbi while B-shares are denominated in foreign currencies.
''The market capitalisation of the CSI 300 represents around 60% of total A-shares,'' said Somchai Boonnamsiri, the CEO of Krung Thai Asset Management.
He said premiums for A-shares were now close to zero when compared with H-shares, or shares of Chinese firms listed on the Hong Kong stock exchange.
By contrast, in 2007 the premium gap was almost 100% between A-shares and H-shares. Mr Somchai said valuations for the domestic Chinese market are quite attractive, with A-shares trading at around 13 times forward earnings, close to the 12 times forward price-to-earnings ratio for the Stock Exchange of Thailand.
Darabusp Pabhapote, a KTAM executive vice-president, agreed the timing was right for Thai investors seeking to diversify their equities portfolio beyond domestic stocks.
Minimum investment will be set at 10,000 baht, with the initial public offering period set for early November and a listing on the SET following later that month. KTAM has set a target size for the fund at 3 billion baht.
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