China ETFs

China ETFs: OCBC 's base case is for a soft economic landing in China, and forecasts real GDP growth to gradually slow from 7.7% pa in 2012-13, to 7.3% in 2014 and 7.1% in 2015. Given this benign baseline, the house believes the A50 China Index, currently trading at 7.1x P/E, and 1.2x P/B is attractively valued, particularly when put against regional and global peers. In addition, 46% of the A50 index components, by index weight, currently trade at a discount to their dual -listed H-shares, which further points to an undervalued A50 China Index. The upcoming Shanghai-HK Stock Connect (expected in late Oct ) will be a key catalyst, as it will allow, for the first time, institutional and retail foreign investors to purchase Shanghai A-shares through the HKEx as long as they have an account with an eligible broker. This could unleash significant pent up demand for A50 shares from foreign investors. OCBC estimates the RMb13b daily net quote and Rmb300b aggregate can increase the A50 's avg daily value traded by 12% to 29% , and have a significant re-rating impact. OCBC sees the iShare FTSE A50 China ETF (2823 HK) as the most liquid way for foreign investors to establish a diversified A50 position and benefit from the HK-HK Connect catalyst. To gain exposure to A-shares, SGX offers the following China ETFs: - United SSE 50 China (JK8) - DBXT China50 (HD8) - DBXT CSI300 (KT4) - DBXT MSCHINA (LG9)