Government's tracker attracts good response The initial public offering (IPO) of the Government-backed Tracker Fund of Hong Kong (TraHK) got under way on Monday to greater-than-expected interest from retail investors, who queued for hours to get application forms.
At about HK$10 billion, the investment trust's float is one of the largest IPOs to be carried out in Hong Kong and was partly blamed for drawing liquidity out of the stock exchange last week. Short-term interest rates came under pressure as foreign investors bought Hong Kong dollars to apply for TraHK units.
Details of TraHK's launch terms were announced on October 24.
Units will sell at a discount of at least 5 per cent to the reference market price, with the maximum unit price set at HK$13.80. Small investors must apply for at least 1,000 units but no more than 300,000.
Retail investors will receive a loyalty bonus of one unit for every 20 units held for one year and a further one unit for every 15 units held for two years. That works out to a 5 per cent bonus after one year and an additional 6.7 per cent bonus after two years.
The final size of the offering will be announced on November 11, and the launch price of units will be announced the next day, the same day they start trading on the Stock Exchange of Hong Kong.
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