Mainland Telcos Rise On Tracker Fund U-turn

Share prices of the three biggest telecom firms on the mainland - China Mobile, China Unicom and China Telecom - rose during early trade on Thursday, after the manager of Hong Kong’s Tracker Fund (TraHK) said it will resume buying stocks blacklisted by Washington.

The announcement by State Street Global Advisors on Wednesday night came just two days after it said it would not make new investments in firms that the US deemed to be linked to the Chinese military - a move which could result in the Tracker Fund deviating from the Hang Seng Index, which holds China Mobile and China Unicom as constituent stocks.

“TraHK’s investment objective is to provide investment results that closely correspond to the performance of the Hang Seng Index. The Manager seeks to achieve this investment objective by investing all, or substantially all, of TraHK’s assets in shares of constituent companies of the Hang Seng Index in substantially the same weightings as they appear in the Hang Seng Index,” said State Street Global Advisors Asia in a statement.

But it reiterated that the Tracker Fund is not suitable for Americans to invest in because of the US ban.

The reversal came after Chief Executive Carrie Lam as well as executive councillor and former Monetary Authority chief Joseph Yam called for the replacement of the exchange-traded-fund’s manager, a US company, given the restrictions.

The three telco firms have seen themselves delisted from the New York Stock Exchange and removed from index products in recent weeks due to Washington's order.