TAIPEI: A new cross-listing policy will allow Taiwanese investors to begin investing directly in Hong Kong exchange-traded funds (ETFs), before the end of trading this week.

Hang Seng Investment Management Ltd will begin offering its two dual-listed ETFs on the Taiwan Stock Exchange (TWSE) Friday, the company's chief investment officer said yesterday.

Hang Seng Bank announced on July 29 that two ETFs managed by its wholly owned subsidiary Hang Seng Investment Management - Hang Seng Index ETF and Hang Seng H-Share Index ETF - had been approved by Taiwan's Financial Supervisory Commission (FSC) for listing applications with the TWSE.

Clement Ho, director and chief investment officer of Hang Seng Investment Management, was bullish on the ETFs near-term prospects, saying stock markets in both mainland and Hong Kong would retain their upward momentum into the second quarter of 2010.

Though some analysts fear credit risks and asset bubbles might compel the mainland government to change its moderately loose monetary policy, Ho thinks the mainland's monetary policy will remain unchanged, arguing that the timing is not right for changes.

Unless mainland exports increase dramatically and positive employment numbers are seen, the government is unlikely to initiate a large-scale retrenchment policy, Ho said.

Hang Seng Bank said on July 29 the two ETFs were the first Hong Kong ETFs to have obtained permission from the FSC to apply for dual-listing under a cross-listing regime recently established by Hong Kong and Taiwan.

HSBC Global Asset Management (Taiwan) Limited has been appointed the master agent of the ETFs in Taiwan, and Yuanta Securities was the first firm to be appointed as a participating dealer.

China Daily/CNA

(HK Edition 08/12/2009 page2)