Posted inHong Kong

CSOP brings more A-share L&I products to Hong Kong

The firm manages the most number of L&I products in the SAR.

CSOP Asset Management is growing the list of leveraged and index (L&I) products tracking A-share indices listed in Hong Kong with the launch of two products.

The CSOP FTSE China A50 Index Daily Leveraged (2x) Product and the CSOP FTSE China A50 Index Daily Inverse (-1x) Product will be listed on the Hong Kong Exchange tomorrow, according to a statement from the firm.

The development of A-share L&I products in Hong Kong is relatively new, as the Securities and Futures Commission (SFC) only allowed the launch of L&I products that track mainland equity indices in May last year.

Both CSOP AM and China Asset Management were the first to take advantage of the new regulations, with each rolling out two L&I products – all of which tracking the CSI 300 Index – in July.

With the new CSOP products, there will be a total of six A-share L&I products listed in Hong Kong.

According to a CSOP AM spokesman, the new products have already gained traction, with the leveraged and inverse products amassing $11m and $22m in assets during their initial offering period, respectively.

CSOP already has an ETF tracking the FTSE China A50 Index, which was listed in August 2012.

“We launched the new China A50 index leveraged and inverse products to help investors capture the two-way opportunities of China A50 index, offering more China A-shares investment tools to offshore investors while enriching the financial ecosystem of A50 index,” the spokesman said.

Leveraged and inverse (L&I) products magnify the returns or losses of a market index depending on the multiplier and market movement. Currently, there are 28 such products in Hong Kong and the sector remains small, accounting for 3.7% or HK$14.62bn ($1.89bn) of Hong Kong’s HK$393bn ETF market as of the end of December last year, according to data from HKEX.

CSOP AM manages the most number of L&I products in Hong Kong, having listed 12 of them (six of them last year) on the local bourse, according to data from the exchange.

The firm claims that it has dominated Hong Kong’s L&I market, with more than 96% and 90% market shares in terms of average daily turnover and assets under management, respectively, the statement said.

Part of the Mark Allen Group.