FTSE Viet Nam ETF to be delisted in Sweden, France

Thursday, Aug 27, 2015 08:00

FTSE Viet Nam ETF is now managing US$371.9 million investment in 16 stocks on the HCM Stock Exchange. — Photo cafef.vn

HA NOI (Biz Hub) — Deutsche Asset&Wealth Management (Deutsche AWM), a division of Deutsche Bank AG, will remove its FTSE Viet Nam ETF from the Stockholm Stock Exchange and Euronext Paris from September 25.

However, FTSE Viet Nam ETF will remain listed on other eight international stock exchanges listing Deutsche AWM's Exchange Traded Funds.

On September 4, FTSE Viet Nam ETF will conduct the third restructuring of its investment list this year. This will take effect on September 21.

FTSE Viet Nam ETF is now managing US$371.9 million investment in 16 stocks on the HCM Stock Exchange.

Deutsche AWM said the move was a part of its plan to remove 43 Exchange Traded Funds (ETFs), including FTSE Viet Nam ETF, and close 10 Exchange Traded Commodities (ETCs) from international exchanges.

Deutsche AWM said in its report the move was to concentrate on a few or only one exchange as the trading volume of some ETFs listed on numerous exchanges only achieved low turnover.

The division said its trading volume last Friday on the Swedish and French markets was 183 and 3,050 fund certificates respectively, which was low compared to the figures on other exchanges, such as 164,714 certificates on London Stock Exchange and 40,268 certificates on Deutsche Borse-Extra.

The Deutsche Bank's division said that concentrating liquidity on a single trading venue may result in low bid-ask spreads and could lead to lower transaction costs for both investors and the division itself.

Investors in the ETFs and ETCs that were being closed and removed would not have to do anything, the division said, adding that the money would be automatically delivered to investors once the securities in the fund assets were liquidated.

The information is not good for some Vietnamese investors and brokers as they did not clearly understand the Deutsche AWM's move.

However, companies such as the HCM City Securities Corporation (HSC) saw the move as good for the local stock market as the fund would become more attractive to local investors.

HSC said the move would help increase ETF's trading liquidity on Viet Nam's securities market and reduce the gap between the asking and offering prices.

HSC said the fund's market liquidity had been low for a long time and the difference between the asking price and offering price was large as the fund was listed on various exchanges at the same time.

It predicted the move would barely have effects on the fund's investment flow in short term and save costs for the ETF.

VietDragon Securities Corporation (VDSC) said that the restructuring of Deutsche Bank AG's ETFs would have slight effects on the securities market, however, the news may have negative effects on investors as they lacked necessary information about it.

According to VDSC, the FTSE Viet Nam ETF's average trading values in the last two months on the Euronext Paris and Stockholm Stock Exchange were among five lowest markets in 10 international markets that list the fund with $20,847 and $127,040 respectively. — VNS

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