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Is OBOR more than a buzzword?

China’s epic infrastructure project, ‘one belt one road’, is getting its own index, according to the Hong Kong Stock Exchange. But OBOR does not excite fund managers.
by Fund Selector Asia

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China’s massive OBOR initiative is focused mainly on building roads, bridges, gas pipelines, ports, railways, and power plants across 65 countries in Asia, the Middle East, Europe and Africa and has an investment requirement of $5trn, according to a PwC report.

To assist with funding, the Hong Kong Stock Exchange is planning an OBOR index composed of relevant A-shares and Hong Kong-listed companies, which can be traded via the Stock Connect scheme.

“A stock index would be a good way to start helping investors who are seeking exposure to companies with belt and road investments”, HKEx CEO Charles Li said in a statement yesterday.

The index will be compiled by China Exchanges Services Company, a joint venture between the Shanghai and Shenzhen stock exchanges which has launched indices such as the CSI 300 benchmark.

Open Door Investment Management, a China equity focused fund house with offices in Shanghai and San Francisco, said it has invested in A-shares relevant to OBOR development, although it is a long-term theme that might take years to materialise, as reported earlier. 

The holdings include a Xinjiang-based power transmission equipment maker, a industrial science park developer, and as airport equipment maker.

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