China ESG - Weekly news update: Chinese Fund Managers Rush To Capitalize On Investors' Green Fever

Chinese Fund Managers Rush To Capitalize On Investors' Green Fever

Chinese money managers are rushing to launch new energy funds, seeking to capitalize on investors’ green fever which has been fuelled by President Xi Jinping’s carbon neutrality pledge.

China’s first photovoltaic industry exchange-traded fund (ETF), launched by Huatai-PineBridge Fund Management Co in December attracted hot demand, with assets under management jumping nearly six-fold in just a month to 10 billion yuan ($1.55 billion). A slew of mutual fund houses are following suit, with Yinhua Fund Management Co raising money for a rival product this week while Tianhong Asset Management Co plans to launch an index fund that invests in solar power companies next Monday. More green energy funds are in the pipeline. The funds will likely bring more money into an already red-hot sector. China’s new energy index doubled last year, pushing up the sector’s earnings multiples to almost 90 compared with 22 for Chinese stocks broadly.

Source: Thomson Reuters

China Maps Out Rules for Cranking Up National Carbon Market

China issued overarching rules for carbon trading, laying out the regulatory framework for a long-awaited national market as the world's biggest emitter of greenhouse gases including carbon dioxide (CO2) moves to fight the causes of global warming.

The Ministry of Ecology and Environment issued the rules Tuesday governing nationwide carbon trading, effective Feb. 1. Under the rules, provincial governments will be allowed for the first time to set pollution caps for big power companies. China is pursuing a goal of decarbonizing the economy by 2060. The new document provides the general framework for the carbon market, which can be expected to start operating in the second quarter.

Source: Caixin

China Greenlights First Five Manager-of-Managers Funds

China has given the go-ahead for the first batch of manager-of-managers funds in a bid to boost the availability of products with asset allocation features in the market.

The China Securities Regulatory Commission granted approval to five manager-of-managers funds run by China Asset Management, CCB Principal Asset Management, Penghua Fund Management, China Merchant Fund Management and TruValue Asset Management on the last day of 2020, official records show. The greenlight comes around a year after China officially introduced the regulatory framework that governs manager-of-managers funds available to retail investors in December 2019. 

All five funds are designed to open for subscription and redemption only once in a year, most likely for a period of just two to three weeks. The five funds have an inception threshold of Rmb50 million (US$7.65 million), much lower than the normal Rmb200 million minimum requirement, indicating that retail asset raising could be more challenging for the firms.

Source: Ignites Asia

​Ninety One Launches First Green Fund For Singapore's Retail Investors

Ninety One, formerly Investec Asset Management, has launched its first retail-oriented green fund in Singapore, making it the latest global manager to roll out a sustainable investment product amid Singapore’s environmental, social and governance product investing push.

The South Africa-headquartered asset manager announced the launch of its Luxembourg-domiciled Global Environment Fund on Tuesday for retail investors in the city-state. The fund had previously only been available to accredited investors in Singapore, according to records from the Monetary Authority of Singapore. Authorization as a retail fund was confirmed on December 24 last year, MAS records show.

Ninety One has stated that it does not refer to the fund as an ESG product for compliance reasons, according to a company spokesperson. However, even amid calls for more transparent and standardized labeling for sustainable investment strategies, the company declined to provide an explanation for this decision.

Source: Ignites Asia

Bye-bye, plastic straws

The first day of 2021 marked the beginning of China's plan to reduce plastic pollution by banning single-use plastics. The plan was unveiled in January 2020, and details steps to reduce plastic pollution from 2020 to 2025, with the likes of plastic bags and straws targeted in phase 1.

A report released by Hua'an Securities predicts that by 2025, the consumption demand of domestic degradable plastics is expected to reach 217 tonnes, with the market scale values 47.7 billion yuan ($7.3 billion). By 2030, the demand is expected to reach 388 tonnes, with a market worth 85.5 billion yuan ($13.9 billion).

Source: CGTN

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