Yam drive to have TraHK boss replaced

Top News | Avery Chen 13 Jan 2021

Joseph Yam Chi-kwong, an Executive Council member who used to be chief executive of the Hong Kong Monetary Authority, says fund managers who can't freely trade all blue-chip stocks are unfit to run the Tracker Fund of Hong Kong, after the most popular stock market tracker dropped three US blacklisted companies.

Managed by US bank State Street Global Advisors Asia, the HK$105.41 billion Tracker Fund on Monday said it will not make new investments in Chinese companies that have been sanctioned by the United States.

The move complies with US President Donald Trump's executive order banning US investments from Chinese firms linked to Beijing's military. Three blue-chip stocks - telecom giants China Mobile and China Unicom as well as major oil producer CNOOC - have been added to the list.

Yam, who also serves as executive vice president of the China Society for Finance and Banking, a society managed by the People's Bank of China, said the fund is supposed to track the overall performance of Hang Seng Index constituents, with an aim to developing the Hong Kong exchange traded fund market.

"If the manager can't trade some Hang Seng Index constituent stocks, leading to a failure to closely correspond to the performance of the benchmark, they are hardly fit for the position," he said.

This came hours after Chief Executive Carrie Lam Cheng Yuet-ngor said the Monetary Authority still has some influence on the appointment of Tracker Fund's supervisory committee member.

Stephen Law Shing-yan, deputy general counsel of the authority, is among the six members of the committee.

Others include George Hongchoy Kwok-lung, chief executive of the Link Real Estate Investment Trust, Romnesh Lamba, co-head of the market development division at Hong Kong Exchanges & Clearing, Blair Pickerell, former Asia chief executive of Morgan Stanley and HSBC Investments, Chan Ka-lok, Wei Lun professor of finance at the Chinese University, and Kam Pok-man, former chairman of Hospital Authority Provident Fund Scheme.

The Tracker Fund was set up by the SAR 22 years ago to dispose of stocks worth HK$118 billion that were acquired during the market intervention in 1998 financial crisis to defend its currency peg. Yam was one of the three officials who initiated buying blue chips.

On Sunday, Wall Street groups Goldman Sachs, JPMorgan, and Morgan Stanley said they will delist 500 structured products linked to US banned companies. BlackRock has been selling shares of three Chinese telecommunication companies sanctioned by the US in recent weeks, Bloomberg reported yesterday.

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