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Nikko AM's ETF benchmarked to ChinaBond-ICBC RMB Bond Index is now listed on the SGX

Felicia Tan
Felicia Tan11/24/2020 03:35 PM GMT+08  • 3 min read
Nikko AM's ETF benchmarked to ChinaBond-ICBC RMB Bond Index is now listed on the SGX
The ETF is the first one to be linked to the index.
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The NikkoAM-ICBCSG China Bond exchange traded fund (ETF), which provides global investors easy access to Chinese government and policy bank bonds, has been listed on the Singapore Exchange (SGX) on Nov 24.

Launched by Nikko Asset Management (Nikko AM) and the Industrial and Commercial Bank of China (ICBC), the ETF, which helps investors capitalise on the world’s second largest fixed income market, replicates the performance of the ChinaBond-ICBC 1-10 Year Treasury and Policy Bank Bond Index.

At its listing, the ETF has assets under management (AUM) of US$192 million ($257.8 million) and provides a significant 60% exposure to Chinese policy banks bonds that offer a higher yield over Chinese treasury bonds.

This is the first ETF linked to the ChinaBond-ICBC RMB Bond Index developed by ChinaBond Pricing Center Co (CBPC), the subsidiary of the China Central Depository & Clearing Co (CCDC).

ICBC, CCDC and SGX, in 2019, signed a memorandum of understanding to jointly promote the suite of onshore bond indices and develop financial products using the indices as the underlying.

SEE:China Evergrande gets US$4.6 bil lifeline from state-linked companies

SGX is the first exchange outside of China to disseminate these indices.

“We chose to list the NikkoAM-ICBCSG China Bond ETF during the period of the China-Singapore (Chongqing) Connectivity Initiative Financial Summit to demonstrate the financial connectivity between China and Singapore as well as to promote better linkages between our capital markets and that of ASEAN and across the globe,” says Wang Jingwu, ICBC’s senior executive vice president.

“Leveraging on its network of more than 70 countries and regions, and its advanced integrated operating systems for both domestic and overseas businesses, ICBC will continue to contribute to the two-way financial connectivity by developing new services and helping more overseas entities to enjoy the benefits of China’s rapid economic development,” Wang adds.

“We are pleased to welcome the listing of NikkoAM-ICBCSG China Bond ETF which meets the increasing investor demand for easy and efficient access to China’s bond market. Interest for RMB bonds and assets is expected to continue to rise in tandem with the recovery of China’s economy and opening up of the country’s financial markets. We are also delighted that our collaboration with ICBC and CCDC has resulted in tangible outcomes and we look forward to more initiatives to support the internationalisation of China and the RMB,” says SGX CEO Loh Boon Chye.

As at 3.37pm, shares in SGX were trading 8 cents lower or 0.9% down at $9.15.

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