LION GLOBAL INVESTORS AND OCBC SECURITIES ESTABLISH FIRST TECH-FOCUSED ETF IN SINGAPORE
The Lion-OCBC Securities Hang Seng TECH ETF captures the growth potential of the 30 largest technology companies listed in Hong Kong1 and offers investors an easy and affordable way to access these companies.
Singapore – Lion Global Investors and OCBC Securities will establish Singapore’s first technology-focused Exchange Traded Fund (ETF) on the Singapore Exchange (SGX) on 10 December 2020.
This is a collaboration that combines the fund management expertise of Lion Global Investors and strategic focus of OCBC Securities in bringing global securities to customers, deepening synergies within the OCBC Group.The Lion-OCBC Securities Hang Seng TECH ETF gives investors an easy and affordable way to access Hong Kong-listed technology-themed stocks.
The ETF tracks the Hang Seng TECH Index, which is made up of the top 30 technology companies listed in Hong Kong by market capitalisation that have high business exposure to technology themes.
The ETF’s Initial Offering Period (IOP) starts on 23 November 2020 and ends on 7 December 2020. It will list on the SGX on 10 December 2020 and will be available in both Singapore and US dollar denominations.
Growth potential of 30 largest technology-themed companies
This ETF is designed to capture the growth of these Chinese TECH-themed companies including those “homecoming” companies seeking a secondary listing on Hong Kong Stock Exchange (HKEX) as well as companies looking to list on HKEX. These listings represent the new economy companies in the Hong Kong market. For instance, Alibaba Group raised a record-breaking US$12.9 billion in its Hong Kong secondary listing in 2019.
According to back-tested data from Hang Seng Indexes Company Limited, the Hang Seng TECH Index returned 36.25% in 2019 and 35.30% in the first half of 2020.
Customers have also shown increased interest in the Hong Kong market – the year-to-date October trading volume among OCBC Securities customers has grown by more than 30% compared to the same period last year. Chinese technology themed companies have been the top traded counters consistently. OCBC Securities also saw a surge in interest in ETFs, with retail customers’ trading volume in the first 10 months of 2020 already triple that of 2019.
An easy and affordable access for investors
This technology ETF is classified as an Excluded Investment Product (EIP), an investment product that is less complex and more easily understood by retail investors unlike some ETFs which are classified as Specified Investment Products (SIP) which require investors to go through Customer Account Review (CAR).
Upon listing, the new ETF allows investors to buy much smaller lot sizes of just 10 units at one time. This feature makes investing into the ETF particularly attractive to younger and newer investors who can start off with less than SGD20 per trade, based on current Net Asset Value, excluding commissions and fees.
Mr Wilson He, Managing Director of OCBC Securities, said “2020 is a year of change for all of us. We have seen how the pandemic impacted our lives and how technology has stepped in to give a glimpse of normalcy in the changed world. The technology sector has significantly outperformed the broader equity market during this period and technology stocks have benefitted from changes in consumer behavior as well as digital transformation of businesses.The Lion-OCBC Securities Hang Seng TECH ETF comes at the right time to ride this wave of change and bullish sentiment. It allows investors a chance to gain access to the rapidly-growing Chinese technology giants.”
The ETF is also OCBC Securities’ first ETF and is part of the brokerage’s strategy to expand its unique product offerings to its customers and to attract new investors.
On the launch, Mr Gerard Lee, Chief Executive Officer at Lion Global Investors, said: “The Lion-OCBC Securities Hang Seng TECH ETF allows investors in Singapore a convenient and cheap way of investing in a secular trend that is underway. Other than investing in the merits of companies at the forefront of disruption and innovation, this ETF gives investors an easy avenue to express their view on fundamental changes happening in geopolitics. The superpower rivalry between China and US has resulted in a bipolar world where the tech champions in our time zone will be listed in Asia instead of the US. Although there are similar ETFs listed in Hong Kong, the Lion-OCBC Securities Hang Seng TECH ETF is the first technology focused ETF established on the SGX which allows investors to invest and trade in a security denominated in SGD and USD. We’re confident that this ETF will have high trading volume and liquidity.”
How to invest in the Lion-OCBC Securities Hang Seng TECH ETF
The Initial Offering Period will open on 23 November 2020 and close on 7 December 2020. The Issue Price of each Unit during the Initial Offering Period is HKD7.75, approximately SGD 1.34 or USD 1.00.
During the Initial Offer Period, investors may subscribe to the ETF through the Participating Dealers. Orders can be placed through OCBC Securities, , iFAST Financial, Phillip Securities and UOB Kay Hian.
Once the ETF is listed on SGX on 10 December 2020, investors will be able to trade through their brokers and respective trading platforms.
Investors can trade in SGD or USD, using either cash or Supplementary Retirement Scheme (SRS).