Lion Global Investors and OCBC Securities will establish Singapore’s first technology-focused exchange traded fund on the Singapore Exchange (SGX). The ETF tracks the Hang Seng TECH Index, which is made up of the top 30 technology companies by market capitalization listed in Hong Kong.
The ETF’s initial offering period started on November 23 and ends on December 7. It will list on the SGX on December 10 and will be available in both Singapore and US dollar denominations.
The Lion-OCBC Securities Hang Seng TECH ETF gives investors an easy and affordable way to access Hong Kong-listed technology-themed stocks. It is designed to capture the growth of Chinese tech-themed companies including “homecoming” companies seeking a secondary listing on the Hong Kong stock exchange. One such company is Alibaba Group, which raised a record-breaking US$12.9 billion in its Hong Kong secondary listing in 2019.
The Hang Seng TECH Index returned 36.25% in 2019 and 35.30% in the first half of 2020, according to data from data from Hang Seng Indexes Company Limited.
The Hang Seng TECH ETF is classified as an excluded investment product. It is less complex and more easily understood by retail investors than some other ETFs which are classified as specified investment products 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 new and younger investors who can start off with less than S$20 (US$15) per trade, based on current net asset value, excluding commissions and fees.
Comments OCBC Securities managing director Wilson He: “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 benefited from changes in consumer behaviour 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 offering is OCBC Securities’ first ETF. The issue price of each unit during the initial offering period is HK$7.75, approximately S$1.34 or US$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. Upon its listing on SGX on December 10, investors will be able to trade through their brokers and respective trading platforms.