Capital Gold Group Report: Hong Kong Approves First Gold ETF to Meet Investor Demand
Commentary: ETF's add to global gold demand and allow investors to
participate in the commodities market, but do not provide the safety and
preservation of physical gold assets, nor do they add the additional
portfolio diversification of a hard asset allocation in physical gold.
The Hong Kong Securities and Futures Commission has approved the city`s first gold ETF
The Hong Kong Securities and Futures Commission has approved the city`s first gold exchange-traded fund to meet investors` demand after bullion prices climbed.
State Street Global Advisors, the money-management unit of the world`s second-largest manager of exchange-traded funds, and the World Gold Council will give details on July 24, according to a media invitation sent by Hill & Knowlton Asia Ltd.
Hong Kong wants to bolster its position as an Asian financial center as rivals Tokyo and Singapore offer commodities trading. Gold for immediate delivery has jumped 39% in the past 12 months as investors seek an inflation hedge and alternative assets as global equities declined.
"Gold-related investment products are expected to be well received when inflation remains high as investors are seeking ways to preserve their wealth," Kenny Tang, associate director at Tung Tai Securities, said in Hong Kong. "An ETF makes investment in gold easier and more accessible for public investors. What they need is only a stock-trading account."
The listing in Hong Kong comes after a similar fund started trading in Japan this year and in Singapore in 2006. Hong Kong is also planning to start a commodities exchange in the first quarter of 2009 and will offer dollar-denominated fuel oil contracts for delivery into China.
"We have seen growing investor interest in the commodities market and have been working with industry participants to enable the introduction of different commodities products," the regulator said on July 24 in a statement on its Web site.
The SPDR Gold Trust was approved on July 21, the regulator said. It didn`t say when the fund will start trading.
Hong Kong Exchanges & Clearing Ltd., the operator of Asia`s third-largest stock market, is trying to reduce its reliance on stocks by venturing into commodities. The bourse will start trading gold futures in October.
Capital Gold Group, commodities, gold group, gold, gold prices, gold news, gold coins, gold bullion, gold demand, gold ETF, gold IRA, IRA gold
