FINANCIAL AND MONETARY AFFAIRS
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(save for a portion approximately equal in value to 5 per cent of the Exchange Fund which is to be retained for long term investment purposes). Having considered various methods of disposal, members of EFIL's Board of Directors concluded in June 1999 that it would be appropriate to launch the disposal programme in the form of a unit trust product tracking the HSI. This unit trust has become known as the Tracker Fund of Hong Kong, or TraHK.
TraHK has been authorised by the Securities and Futures Commission in Hong Kong and has been listed on the Stock Exchange of Hong Kong. State Street Global Advisors (HK) Limited is the fund manager of TraHK and State Street Bank and Trust Company is its Trustee. A Supervisory Committee oversees the Trustee and Manager in relation to the administration and management of TraHK. TraHK is designed to provide investment results that closely correspond to the performance of the HSI. To achieve this objective, TraHK holds a portfolio of stocks reflecting the composition and weighting from time to time of all of the shares in the HSI.
On October 11, the Financial Secretary officiated at the brand launch of TraHK, marking the commencement of the marketing campaign. The initial offer of TraHK, comprising a Hong Kong retail offer and an international institutional offer, commenced on October 25. The retail offer closed on November 4, 1999 and the institutional offer closed on November 5.
The initial offer of TraHK received a positive response from both retail and institutional investors in Hong Kong and institutional investors in Asia, Europe and North America. A total of 184 314 valid applications were received in the retail offer, reflecting a total demand of approximately $28 billion. Total demand from institutional investors was about $20.3 billion. On November 8, EFIL announced that the initial issue size would be $33.3 billion, an increase from the indicative offer size of $10.0 billion stated in the prospectus for TraHK. The units were priced at $12.88 each, representing 5.25 per cent discount to a reference market price (being essentially a three-day averaged market price). In addition, eligible retail investors will be entitled to receive one loyalty bonus unit for every 20 units held continuously for one year and another one loyalty bonus unit for every 15 units held continuously for two years.
Dealings in TraHK units on the Stock Exchange of Hong Kong began on November 12. The successful launch of TraHK is a significant milestone for EFIL in implementing its mandate of orderly disposal of the Exchange Fund's Hong Kong equity portfolio. Apart from providing Hong Kong investors with a new investment opportunity, TraHK should also help to increase the depth and liquidity of the stock and futures market in Hong Kong. The overwhelming interest in the initial offering of TraHK, the largest ever in Hong Kong, as well as Asia (excluding Japan), was seen by commentators as a sign of investor confidence in the prospects of Hong Kong.
Companies Registry
The Companies Registry administers and enforces certain sections of the Companies Ordinance. It incorporates local companies, registers overseas companies, registers documents required to be submitted by registered companies and provides facilities for the search of company records. It also administers and enforces several other ordinances including the Trustee Ordinance, insofar as it relates to trust companies, the Registered Trustees Incorporation Ordinance and the Limited Partnerships Ordinance.