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Press Releases

Tracker Fund of Hong Kong (TraHK) Tap Issue Limit

Exchange Fund Investment Limited (EFIL) announced today (Monday) that the Hong Kong Monetary Authority (HKMA) has advised State Street Global Advisors Asia Limited, the Manager of TraHK, that the maximum number of Units for which Hang Seng Index Shares will be made available under the Tap Facility for the period from 1 October 2002 to 31 December 2002 will be 620 million Units. The value of this Tap Issue Limit is approximately HK$6 billion, calculated by reference to the Nominal Closing Price of a Unit of TraHK quoted by the Stock Exchange of Hong Kong on 16 September 2002.

On the advice of EFIL, the HKMA has also announced its intention to terminate the Tap Facility when the next Tap Issue Limit is exhausted in the fourth quarter of this year. After the exhaustion of the Tap Limit, all the remaining Hong Kong stocks held in the disposal portfolio of the Exchange Fund, estimated at HK$3.2 billion at current prices, will be retained by the Exchange Fund as part of its long-term investment portfolio.

"I am extremely pleased that the disposal programme of the Hong Kong equities purchased by the Government during the 1998 stock market operation will be completed upon the exhaustion of the Tap Limit in the next quarter. As a result of the retention of the residual stocks in the disposal portfolio, the Exchange Fund’s holding of Hong Kong equities will be around 5.3%, which is very close to the 5% allocation to Hong Kong equities under the strategic investment benchmark. We do not intend to change this slight overweight position or to alter our present holding in Hong Kong equities in any material manner in the foreseeable future." Mr Joseph Yam, Chief Executive of the HKMA said. "We are most grateful to the Honourable Mr Yang Ti-liang and his fellow Directors at EFIL for their excellent work in running the disposal programme. EFIL has made a major contribution to the financial stability in Hong Kong by achieving the very difficult mandate of returning the stocks purchased by the Government to the private sector in an orderly manner." added Mr Yam.

Mr Antony Leung, the Financial Secretary, said, "I wish to pay tribute to the Chairman of EFIL, the Honourable Mr Yang Ti-liang, and other members of the Board for their remarkable achievement in the successful launch of TraHK, the first ever Exchange Traded Fund in Hong Kong; and the design of the innovative Tap Facility, through which the Exchange Fund has been able to effectively dispose of its Hong Kong shares in an orderly manner."

The Honourable Mr Yang Ti-liang, the Chairman of EFIL, said, "I am pleased that by the time the next Tap Facility is exhausted, EFIL will have completed its mandate of disposing of the Hong Kong equities acquired by the Government in 1998 in an orderly manner with minimal disruption to the market. I would like to thank my fellow Directors, past and present, for their support and wise counsel and the staff of EFIL for their untiring efforts and dedication in contributing to the success of the disposal programme."

 

Annex

Disposal and other income of the Hong Kong Equity Portfolio of the Exchange Fund

For further enquiries, please contact:
Fiona Chan, Chief Corporate Development Manager, at 2912 0165.

 

Exchange Fund Investment Limited
16 September 2002

Annex

Disposal and other income of the Hong Kong Equity Portfolio of the Exchange Fund



(HK$ billion)
Cost of shares purchased in August 1998
118.1
Shares transferred from Land Fund (November 1998)
9.0
Proceeds from disposal of Hong Kong stocks

i) Initial public offering of TraHK
ii) Tap facility (Q4 1999 – Q3 2002)
iii) Tap facility Q4 2002 (estimated)
33.3
101.5
6.0
140.8

Dividend and other income
24.4

Total disposal and other income
165.2

Long-term Hong Kong Equity Portfolio after Q4 2002 Tap (estimated)


51.5
Last revision date: 1 August 2011
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