NSE allows China, Hong Kong trading from March 18

Mumbai: Indian investors will now be able to take exposure to Chinese and Hong Kong markets by trading in an exchange-traded fund (ETF) that tracks the Hang Seng index. The Hang Seng Benchmark Exchange Traded Fund (Hang Seng BeES) will be listed on the National Stock Exchange (NSE) from March 18.

Close to 50-60 percent components of the Hang Seng Index are Chinese companies. Some of the leading companies in the index are Bank of China, China Life Insurance Company, China Mobile, Petro China and CNOOC. These five alone have a weight of over 25 percent in the index. "We have raised around Rs 55 crore in the fund from retail and institutional investors," said Rajan Mehta, Executive Director, Benchmark Mutual Fund, the fund house which is launching the index. The fund was open for public subscription between February 15 and 24.

According to NSE, the issue price for each unit of Hang Seng BeES has been fixed at 1,238.89. Hang Seng BeES is an an open-ended index scheme that tracks the Hang Seng on a real-time basis. Further, trading in Hang Seng BeES will not attract securities transaction tax as the scheme is classified as non-equity fund. In the last one year, the Hang Seng index has gained more than 55 percent, while the Shanghai Composite index has risen 25 percent.