HKs CSOP Asset Management To List Southeast Asia Tech ETF In Singapore

SINGAPORE - A Hong Kong financial firm will list a technology-based exchange-traded fund (ETF) here in late June, with similar products expected to hit the local market.

ETF issuer CSOP Asset Management on Tuesday launched the first phase of the market offering for its CSOP iEdge Southeast Asia+ Tech Index ETF, due on 20 June.

It won't be the only one in 2023, as the Singapore Stock Exchange (SGX) expects more regional funds to seek listing here.

A spokesperson for SGX told the Straits Times on Wednesday: “We plan to launch more regional equity ETFs in the coming months. These include listings of China-focused A-share ETFs, under the Singapore-China Products ETF link.

The CSOP ETF joins 38 other ETFs to trade in Singapore, but the second ETF will focus solely on the technology sector, alongside Lion-OCBC Securities Hang Seng Tech ETF, which will trade in December 2020 South of the market.

The CSOP fund aims to leverage the fast-growing technology industry in Southeast Asia and India through its exposure to 30 companies, including Singapore-based online consumer company Sea, Thai component maker Delta Electronics, conglomerate Indonesian Astra International and Indian software and consulting firms. Infosys and Wipro companies.

This ETF will be the fifth CSOP Asset Management fund to be listed in Singapore, following its initial listing in 2019. The previous four funds managed approximately S$1.17 billion (US$1.58 billion) of assets as of 31 March, representing 11% of the Singapore ETF market. .

CSOP Asset Management said the idea of ​​a listing here had been around for several years and that the decision was driven by several key factors, including increased investor interest and a structural shift of manufacturing supply chains to Asia from southeast Asia. .

Lim Choon Siong, research analyst at Provident Wealth Advisory, said the tech sector is doing relatively well due to the optimism surrounding AI, while recent strong earnings have shown these companies are resilient despite the high inflation and rising interest rates.

However, he added that tech stocks tend to be more volatile because expected earnings are further into the future than non-tech stocks, so changes in those expectations have a bigger impact on the stock price.

Lim said investing in the technology sector exposes investors to particular risks. By comparison, a well-diversified portfolio would result in lower volatility, which would reduce capital spillovers in market downturns and thus improve returns.

On the other hand, the CSOP ETF focused on an index with more sector diversity, while other technology indexes have focused solely on the technology sector, said Marcus Teo, ETF specialist at Phillip Securities.

He added that the ETF will allow investors to benefit from the growth of the digital sector, especially in a region like Southeast Asia where internet penetration is still relatively low compared to other parts of the world.

Volume of the ETF traded on SGX in April reached about 148 million units, down 20 units from a year earlier, while revenue fell 45% to $248 million.

The Lion-OCBC Securities Hang Seng Tech ETF was the most traded by volume and second by turnover.

Assets under management for all ETFs listed on SGX stood at $11 billion at the end of May.